Chapter 6: Resource Planning Systems

Enterprise Resource Planning

A packaged business software system that lets a company automate and integrate the majority of its business processes, share common data and practices across the enterprise and produce and access information in a real-time environment.

Rough-cut capacity plan

A plan that is used to check the feasibility of the master production schedule

intermediate

A planning horizon that covers 6-18 months

Closed-look MRP

An MRP- based manufacturing planning and control system that incorporates aggregate production planning, master production scheduling, material requirements planning and capacity requirements planning

Manufacturing Resource Planning (MRP II)

An outgrowth and extension of the original closed loop MRP system.

capacity

The output capabilities of a firms labor and machine resources

Distribution Requirements Planning

The time-phased net requirements from central supply warehouses and distribution centers. It links production with distribution planning by providing aggregate time-phased net requirements information to the master production schedule.

1st- Resource Requirements Plan (RRP), 2nd Rough-cut Capacity Plan (RCCP), 3rd Capacity Requirements Plan (CRP)

What would describe the capacity planning horizon from long to short range?

implosion

When demand information is gathered from a number of field distribution centers and aggregated in the central warehouse, and eventually passed onto the manufacturing facility.

Cloud Computing

When shared resources and other information are made available to users over the Internet, usually for a subscription fee. It allows small businesses, for example, to make use of sophisticated software without actually making the purchase; also termed on-demand computing

Chase Production Strategy

Which of the following basic production strategies works best with make-to-order manufacturing firms? A.) chase production strategy B.) capacity production strategy C.) mixed production strategy D.) level production strategy

Lead Capacity Strategy

a proactive approach that adds or subtracts capacity in anticipation of future market conditions and demand

option overplanning

raising the final requirements of component parts beyond 100 percent in a super bill of materials to cover uncertainty

time fence system

separates the planning horizon into two segments: a firmed and a tentative segment.

The same information to be stored in multiple locations

Legacy MRP systems typically utilized multiple software packages and databases which caused...

Mixed Production Strategy

Maintains stable core workforce while using other short-term means, such as overtime, subcontracting & part time helpers to manage short-term demand.

Single integrator solution

Organizations that choose to implement one single system with all of the desired applications from a single vendor is said to have chosen a...

Aggregate production plan

The __________ specifies which end product is to be made, how many are required, and when they need to be completed

Planned Order Releases

The bottom line of an MRP part record. It designates when the specific quantity is to be ordered from the supplier or to begin being processed. These quantities also determine the gross requirements of the dependent or "children" parts going into this higher level part or product.

Independent Demand

The demand for final products and service parts. It has a demand pattern that is affected by trends, seasonal patterns and general market conditions

Available-to-promise (ATP) quantity

The uncommitted portion of a firms planned production. It is used to promise new customer orders.

level production strategy

Using a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern.

Material requirements plan

Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/or sub assemblies over time period of few days to few weeks? A.) material requirements plan B.) master production schedule C.) resource requirements plan D.) rough-cut capacity plan

Bill of Materials

Which of the following shows the parent-component relationship and the exact quantity of each component required for making a higher-level part? A.) master production schedule B.) bill of materials C.) distribution requirement plan D.) resource requirement plan

The enterprise resource planning system

Which of the following systems allows changes and other modifications to be executed quickly to minimize delivery lead time? A.) the master production system B.) the enterprise resource planning system C.) the aggregate planning system D.) the financial analysis system

Mixed Production Strategy

Which production planning strategy maintains a core workforce while using overtime, temporary, or part-time workers to manage demand fluctuations?

Chase Production Strategy

Which production planning strategy varies production to match demand?

level production strategy

Which production strategy is best suited for firms needing highly skilled labor when hiring and training cost are high?

The level production strategy

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? A.) mixed production strategy B.) the chase production strategy C.) the aggregate production strategy D.) the level production strategy

Mixed production strategy

Which strategy uses overtime and subcontracting to cope with the high demand periods? A.) the chase production strategy B.) the level production strategy C.) the aggregate production strategy D.) mixed production strategy

The year 2000 millennium bug

While ERP is a relatively new technology, it has grown rapidly since the early 1990s. What is the reason that has contributed to its rapid growth?

ERP systems tie together a variety of specialized systems

Why are firms migrating to ERP systems?

ERP systems are very complex and have proven difficult to implement, particularly in large multibusiness unit organizations

Why might an organization not want to get an ERP system?

ERP provides real time information and can communicate information about changes to supply chain members quickly

Why should an organization get an ERP system?

Electronic Data Interchange (EDI)

a computer-to-computer exchange of business documents such as purchase orders, order status, inquiries and reports, promotion announcements and shipping and billing notices

Master Production Schedule (MPS)

a medium range production plan that is more detailed than the aggregate production plan

planning time fence

a period typically stretching from the end of the firmed segment to several weeks farther into the future; also known as the tentative segment

long-range

a planning horizon that covers a year or more

Chase Production Strategy

a production strategy that adjusts output to match the demand pattern during each production period

Lag Capacity Strategy

a reactive approach that adjusts capacity in response to demand

Capacity Requirements Planning (CRP)

a short-range capacity planning technique that is used to check the feasibility of the material requirements plan

system nervousness

a situation wherein a small change in the upper level production plan causes a major change in the lower level production plan.

best-of-breed solution

an ERP system that picks the best application or module for each individual function

Single integrator solution

an ERP system that uses all the desired applications from the same vendor

Bill of Materials (BOM)

an engineering document that shows an inclusive listing of all component parts and assemblies making up the final product

Super Bill of Materials

another type of bill of materials that is useful for planning purposes

Dependent Demand

The internal demand for parts based on the demand of the final product in which the parts are used

legacy MRP system

A broad label used to describe an older information system that usually works at an operational level to schedule production within a single facility.

Planning factor

A calculation showing the number of units of a specific component required to make one unit of a higher-level part.

demand time fence

A firmed planning segment that is used with the MRP application; it usually stretches from the current period to a period several weeks into the future.

product family

A group consisting of different products that share similar characteristics, components or manufacturing processes.

Resource Requirement Planning (RRP)

A long range capacity planning module that is used to check whether aggregate resources are capable of satisfying the aggregate production plan.

Aggregate Production Plan

A long-range production plan; it sets the aggregate output rate, workforce size, utilization, inventory and backlog levels for a plant.

match

A moderate strategy that adjust capacity in small amounts in response to demand and changing market conditions

short-range planning horizons

A planning horizon that covers a weekly, daily, or hourly basis.

Material Requirements Plan

A software application that has been available since the 1970s; it performs an analysis of the firm's existing internal conditions and reports back what the production and purchase requirements are for a given finished product manufacturing schedule.

bullwhip effect

A term referring to ineffective communication between buyers and suppliers and infrequent delivery of materials, combined with production based on poor forecasts along a supply chain that results in either too little or too much inventory at various points of storage and consumption. Simply, it causes an amplification of the variation in the demand pattern along the supply chain.

Distribution Requirements Plan (DRP)

A time phased finished goods inventory replenishment plan in a distribution network.

Best-of-breed

Enterprise systems made from applications purchased from multiple vendors over time may be referred to as

Make-to-order

Firms that make the customers products based on orders from customers, resulting in long lead times and higher unit cost

Make-to-stock

Firms that typically emphasize immediate delivery of off-the-shelf, standard goods at relatively low prices compared to the chase strategy.

Indented Bill of Materials

Indentations are used to present the level number within the bill of materials; also known as the multilevel bill of materials.