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ch14_ISM[1] - CHAPTER Materials Requirements Planning(MRP...

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221 14 C H A P T E R Materials Requirements Planning (MRP) and ERP D ISCUSSION Q UESTIONS 1. The difference between a gross requirements plan and a net requirement plan is that a net plan adjusts for on-hand inventory and scheduled receipts at each level. 2. Once the MRP system is in place, it provides information to assist decision makers in other functional areas such as the amounts of labor required, cash needs, purchase requirements, and timing. 3. The similarities between Material Requirements Planning (MRP) and Distribution Resource Planning (DRP) are that the procedures and logic are analogous. 4. The difference between Material Requirements Planning (MRP) and Material Resource Planning II (MRP II) is that MRP II includes or integrates functions within the firm in addition to the management of dependent demand inventories. Examples of these additional functions include: Order entry, invoicing, billing, pur- chasing, production scheduling, capacity planning, and warehouse management. 5. The is no one “ideal” lot sizing technique that should be used by all manufacturing organizations. Lot-for-lot is the goal to be sought. However, where setup costs are significant and demand is not particularly lumpy, EOQ is a simple method and typically provides satisfactory results. Too much concern with lot sizing yields spurious results because of MRP dynamics. 6. In a DRP system, inventory residing within the system is moved within the system, rather than entering or leaving the sys- tem. Therefore, although effort should be made to reduce total inventory to minimize overall carrying cost, carrying cost per se does not have a significant effect on appropriate lot size. 7. MRP is usually a part of the overall production planning process. Its most important capability is including the timing/ scheduling factor in inventory planning. MRP II, of course, ad- dresses the timing/scheduling of other resources in addition to inventory. 8. (a) When a work center is only over capacity for one week (or a short time), the production planner has a number of options including ¡# Splitting an order to an earlier or later week ¡# Requesting overtime, an alternate (perhaps more ex- pensive) production process ¡# Subcontracting (b) A consistent lack of capacity suggests a capital invest- ment to increase capacity, add a shift, or develop an outside source. Redesign of the product may also be an alternative. 9. The master schedule is expressed in terms of: (1) end items in a continuous (make-to-stock) company; (2) customer orders in a job shop (make-to-order) company; and (3) modules in a repetitive (assemble-to-stock) company. 10. Virtually all functions of the firm impact an MRP system. For instance, purchasing performance affects delivery, changes in capacity (i.e., labor, maintenance, breakdowns) impact through- put, sales impact the master schedule as do financial issues such as capital expenditure for capacity, engineering performance such as meeting schedules and preference (or flexibility) for particular approaches to design/processing.
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