SCL Chapter 6
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.
Chase Strategy
Adjusts capacity to match demand, so firm hires and lays off workers to match demand. Finished goods inventory remains constant. Works well for make-to-order firms
Bill of Materials (BOM)
Document showing an inclusive listing of all component parts and assemblies making up the final product
What is Available to Promise Quantity? (ATP)
The uncommitted portion of the firm's planned production. - Difference between confirmed customer orders and the quantity the firm planned to produce
match or tracking capacity strategy
a moderate strategy that adjusts capacity in small amounts in response to demand and changing market conditions
Lag Capacity Strategy
a reactive approach that adjusts capacity in response to demand
operations planning is usually hierarchical and can be divided into three broad categories:
long range, intermediate, and short range
Disadvantage of MRP
loss of visibility, especially acute for products with a complicated BOM, and ignores capacity and shop floor conditions
MRP requires
• Independent demand information • Parent-component relationships from the BOM • Inventory status of final product and components • Planned order releases (the most important output of the MRP system)
long-range
Aggregate Production Plan (APP) usually covers a year or more, involves the construction of facilities and major equipment purchase
Short-Range
plan covers a few days to a few weeks. Detailed planning process for components and parts to support the master production schedule (i.e., materials requirement planning - MRP)
Enterprise Resource Planning System (ERP)
provides means for supply chain members to share information so that scarce resources can be fully utilized to meet demand, while minimizing supply chain inventories
Advantage of MRP
provides production and planning information for entire planning horizon
Mixed Production Strategy
Maintains stable core workforce while using other short-term means, such as overtime, subcontracting and part time helpers to manage short-term demand
Level Strategy
Relies on a constant output rate while varying inventory and backlog according to fluctuating demand. Firm relies on fluctuating finished goods levels and backlogs to meet demand. Works well for make-to-stock firms
True or False Manufacturing and service firms need effective production and capacity planning to balance demand and capacity
True
True or False Materials planning, capacity planning, and ERP are used to balance demand with supply
True
True or False Resource planning is the process of determining the production capacity required to meet demand
True
Lead Capacity Strategy
a proactive approach that adds or subtracts capacity in anticipation of future market conditions and demand
Distribution Requirements Planning (DRP)
a time-phased finished good inventory replenishment plan in a distribution network
Which strategy relies on a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern? a)Mixed Production Strategy b)Level Production Strategy c)Chase Production Strategy d)Aggregate Production Strategy e) None of the above are correct
b) level production strategy
Which of the following is considered an advantage/benefit of utilizing in ERP system a) Utilizes multiple databases in order to provide up-to-date information b) Increases the privacy level within an organization, thus functional departments can more easily protect their data from supporting or dependent functional departments c) Allows organizations to more easily communicate information about operational changes to supply chain members d) Increases the bullwhip effect e) None of the above are correct
c) Allows organizations to more easily communicate information about operational changes to supply chain members
Intermediate
plan spans six to eighteen months. Shows the quantity and timing of end items (i.e., master production schedule - MPS)
system nervousness
small changes in the upper-level-production plan cause major changes in the lower-level production plan
Cloud Computing
software vendors offer cloud-based services where end-users log on to remote servers without installing any software or storing data on local hard drives
3 basic methods of calculating ATP quantities:
1. Discrete available-to-promise 2. Cumulative available-to-promise without "look ahead" 3. Cumulative available-to-promise with "look ahead"
firms use a time fence to deal with nervousness by separating the planning horizon into:
1. Firmed Segment (i.e., demand time fence), from current period to several weeks into future. Can only be altered by senior management 2. Tentative segment (i.e., planning time fence), from end of firmed segment to several weeks into the future6
Material Requirements Plan (MRP)
A computer-based materials management system that calculates the exact quantities, need dates, and planned order releases for subassemblies and materials required to manufacture a final product.
Master Production Schedule
A detailed disaggregation of the aggregate production plan, listing the exact end items to be produced by a specific period
