Tutorial A3 q21-30 Flashcards
Why would a manufacturer maintain an inventory?
-Techniques like JIT are not perfect, so some inventory is likely to be needed
somewhere.
-Economies of scale – bulk buying etc. leads to inventory
-Time – processes may work perfectly but what about suppliers/customers? Maintain
supply
-Uncertainties – irregular order patterns, unexpected demand etc
-Inventories ‘buffer’ demand
What are the problems associated with maintaining an inventory?
A large amount of WIP and finished stock (i.e. handling and storage costs) is needed
How does Materials Requirement Planning address the problems associated with maintaining an inventory?
MRP considers firm orders for products and future requirements based on sales forecasts, in order to calculate what materials should be ordered and when
What are the practical aims of MRP?
-Reduce the levels of inventory to a minimum
-Ensure timely delivery of
materials/products
-Aid planning of manufacturing & delivery of materials/products
What are the two outputs of MRP?
Recommended Production Schedule
Recommended Purchasing Schedule
What are the benefits of MRP?
- Great for improving production planning
- Forces companies to be more organised in other aspects (marketing, purchasing etc)
What are the limitations of MRP?
MRP does not take into account:
- Plant capacity
- How many workers are needed
- How much money is needed to buy the materials
What does Manufacturing Resource Planning (MRPII) do?
Overcomes the limitations of MRP by coordinating the production resources of a
manufacturing organisation across factories/sites/countries
How does MRPII achieve the coordination of production resources?
By taking the MPS, completing rough capacity planning, modifying the MPS, then
initiating the MRP process.
What does Enterprise Resource Planning do?
Extends the ideas of MRPII across the whole of a business
Now includes finance, human resources, etc. in addition to manufacturing.
