SCM CH 6

schedule receipt

A committed order awaiting delivery for a specific period.

gross requirement

A time-phased requirement prior to netting out on-hand inventory & lead-time

chase strategy

Adjusts capacity to match demand. Firm hires & lays off workers to match demand. Finished goods inventory remains constant. Works well for make-to-order firms.

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.

MPS

More detailed than APP & easier to plan under stable demand. Breaks down months into weeks / days

planning factor

Number of components needed to produce a unit of the parent item

firmed planned order

Planned order that the MRP computer logic system cannot automatically change when conditions change.

explosion

Process of converting a parent item's planned order releases into component gross requirements

pegging

Relates gross requirements for a part to the planned order releases that created the requirement. Ties the receipt to committed demand.

level strategy

Relies on a constant output rate while varying inventory & backlog according to fluctuating demand. Firm relies on fluctuating finished goods & backlogs to meet demand. Works well for make-to-stock firms.

APP

Sets the production output requirements, workforce needs and inventory plans Enables firm to see its capacity requirements Determines the production strategy the firm will use

planned order release

Specific order to be released to the shop or to the supplier to ensure availability when needed.

available to promise quantity (ATP)

The difference between confirmed customer orders & the quantity the firm planned to produce (amount available to other orders).

Resource Requirement Plan (RRP)

The long-range capacity plan that checks whether aggregate resources are capable of satisfying the aggregate production. Strategic decision

Aggregate Production Plan (APP)

The long-range plan that translates annual business & marketing plans & demand forecasts into a production plan for a product family (products that share similar characteristics) in a plant or facility. Strategic decision

Rough-cut Capacity Plan (RCCP)

The medium-range capacity plan used to check the feasibility of the Master Production Schedule (MPS). Converts MPS from production needed to capacity required, then compares it to capacity available. Tactical decision

Master Production Schedule (MPS)

The medium-range plan that provides a detailed breakdown of the aggregate production plan, listing the exact end items to be produced by a specific period. Tactical decision

safety stock

The minimum projected on hand inventory to protect against uncertainties in demand, supply, quality, & lead time

Material Requirements Plan (MRP)

The short-range plan from a computer-based materials management system that calculates the exact quantities, need dates, & planned order releases for subassemblies & materials required to manufacture a final product. Execution decision

net requirement

The unsatisfied item requirement for a specific time period. Gross requirement for period minus current on-hand inventory.

distribution requirements planning

Ties physical distribution to manufacturing planning and control system by determining the time phased net requirements of the finished goods. Tied to the Independent demand of the finished good Establish requirements for the distribution network and balances warehouse capacity with production plans

time bucket

Time period used on the MRP. <Days / weeks>

Capacity Requirement Plan (CRP)

a short-range capacity plan that is used to check the feasibility of the material requirements plan. Execution decision

low level coding

assigns the lowest level on BOM to all common components to avoid duplicate MRP computations

independent demand

demand for final products affected by trends, seasonal patterns, & general market conditions.

Enterprise Resource Planning Systems (ERP)

information system connecting all functional areas & operations of an organization via common software infrastructure and database

system nervousness

is defines as a small change in the upper-level-production plan which causes major changes in the lower-level production plan.

resource planning

is the process of determining the required resources to effectively and efficiently produce the output required.

RRP, RCCP, CRP

name the three plans for capacity planning

APP, MPS, MRP

name the three production materials planning plans

lot size for MRP

order size for MRP logic

multilevel bill of materials

shows the parent-component relationships & the specific units of components known as the planning factor. Can be presented as an indented bill of materials.

dependent demand

the internal demand for parts based on the demand of the final product in which the parts are used (e.g., subassemblies).

production capacity

the maximum amount an organization can complete in a given period of time based on the resources available

MPS

the production quantity to meet demand from all sources & is used for computing the requirements of all time-phased end items.

common component

used in more than one subassembly

intermediate

which operational planning cycle: Shows the quantity & timing of end items produced Impacted by lead times

short-range

which operational planning cycle: detailed planning process for components & parts to support the planned production schedule execution

business plan

which plan: financial, operational, roadmap

strategic plan

which plan: investment in facilities & major equipment