30079_32b - Other reasons that have been given for the lack...

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Other reasons that have been given for the lack of general adoption for AP models include: 1. The AP modeling approach is viewed as a top-down process, whereas many organizations operate AP as a bottom-up process. 2. The assumption used in many of the models, such as linear cost structures, the aggregation of all production into a common measure, or that all workers are equal, are too simplistic or unrealistic. 3. Data requirements are too extensive or costly to obtain and maintain. 4. Decision-makers are intimidated or unwilling to deal with the complexity of the models' formulations and required analyses. Given this, therefore, it is not surprising that few modeling approaches have been adopted in industrial settings. Although research continues on AP, there is little to indicate any significant mod- eling breakthrough in the near future that will dramatically change this situation. One direction, however, is to recognize the hierarchical decision-making structure of AP and to design modeling approaches that utilize it. These systems may be different for different organizations and will be difficult to design, but currently appear to be one approach for dealing with the complexity necessary in the aggregate planning process if a modeling approach is to be followed. For a com- prehensive discussion of hierarchical planning systems, see Ref. 33. 32.5 MATERIALS REQUIREMENTS PLANNING Materials requirements planning (MRP) is a procedure for converting the output of the aggregate planning process, the master production schedule, into a meaningful schedule for releasing orders for component inventory items to vendors or to the production department as required to meet the delivery requirements of the master production schedule. Materials requirements planning is used in situations where the demand for a product is irregular and highly varying as to the quantity required at a given time. In these situations, the normal inventory models for quantities manufactured or purchased do not apply. Recall that those models assume a constant demand and are inappropriate for the situation where demand is unknown and highly vari- able. The basic difference between the independent and dependent demand systems is the manner in which the product demand is assumed to occur. For the constant demand case, it is assumed that the daily demand is the same. For dependent demand, a forecast of required units over a planning horizon is used. Treating the dependent demand situation differently allows the business to maintain a much lower inventory level in general than would be required for the same situation under an assumed constant demand. This is so because the average inventory level will be much less in the case where MRP is applied. With MRP, the business will procure inventory to meet high demand just in advance of the requirement and at other times maintain a much lower level of average inventory. Definitions AVAILABLE UNITS. Units of stock that are in inventory and are not in the category of buffer or safety stock and are not otherwise committed.
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This note was uploaded on 05/02/2010 for the course ME 100 taught by Professor Any during the Spring '10 term at Purdue University-West Lafayette.

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30079_32b - Other reasons that have been given for the lack...

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