PRODUCTION REQUESTS VERSUS PRODUCTION AUTHORIZATIONS Figure 6.16 on...

PRODUCTION REQUESTS VERSUS PRODUCTION AUTHORIZATIONS

Figure 6.16 on page 197 of the Magal & Word text shows the production process. In a typical manufacturing environment, most planned orders are created automatically by MRP (which the text refers to as "materials planning"), and then one or more persons will convert planned orders to production orders. MRP never creates production orders. We can think of planned orders as "requests" or "suggestions" as to what should be manufactured, and production orders as "authorizations" or "commitments" as to what will be manufactured. 

Suggest why human authorization is required in creating a production order, instead of allowing MRP in creating a production order directly. 

PRODUCTION REQUIREMENTS

Suppose you are in the planning department for a bicycle manufacturer. The sales forecast for next week estimates that a volume of 90 bicycles will be sold. You currently have 25 bicycles in stock, and no other sales orders as of yet. Assuming that the forecast is reasonable, and assuming that you will be able to make all the bicycles you need, how many bicycles must you plan to make? If you have 32 tires in stock, and none already on order, how many tires will you have to purchase in order to be able to carry out the planned production? Show your calculations and explain your answer.