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Final Exam P.O.M
Terms in this set (7)
Enterprise Resource Planning
A computer system that integrates application programs in accounting sales, manufacturing, and the other functions in a firm.
This integration is accomplished through a database shared by all application programs. Can significantly benefit a company, when implemented correctly ERP links all areas of the business.
*For example, Manufacturing knows about new orders as soon as they are entered into the system.
Material Requirements planning
The logic for determining the number of parts, components and materials needed to produce a product.
MRP has been installed almost universally in manufacturing firms, even small facilities.
MRP also provides the schedule specifying when each of these items should be ordered or produced.
MRP is based on dependent demand. Dependent demand is caused by the demand for a higher-level item. Tires, wheels, and engines are dependent demand items based on the demand for cars.
Master product scheduling
Usually deals with end items and is a major input to the MRP process.
Must specify what exactly must be produced.
In order to have a good master schedule the firm must:
1. Include all demands from product sales, warehouse replenishment's, spares, and interplant requirements.
2. Never lose sight of the aggregate plan
3. Be involved with customer order promising
4. Be visible to all levels of management
5. Objectively trade off manufacturing, marketing and engineering conflicts
6. Identify and communicate all problems.
-->A time-phased plan specifying how many and when the firm plans to build each end item.
***To determine an acceptable feasible schedule to be released to the shop, trial master production schedules are tested using the MRP program
Periods of time having some specified level of opportunity for the customer to make changes..
1. Frozen: absolutely no changes to only very minor changes
2. Slushy: limited changes if parts are available
3. Liquid: may allow almost any variation in products, with provisions that the capacity remains about the same and that there are no long lead items involved.
Available to promise: A feature of MRP systems that identifies the difference between the number of units currently included in the mast schedule and the actual (firm) customer orders.
Demand for products:
-->Come from two main sources:
1. Customer: who have placed specific orders, such as those generated by sales ppl or from inter-department transactions. Customers also place orders for things other than just end items like parts or components for repair or spare.
2. Aggregate production plan: reflects the firms strategy for meeting demand in the future. The strategy is implemented through the detailed master production schedule.
Bill of materials
Complete product description, listing the materials, parts, and components and also the sequence in which the product is created
Often called the product structure life or product tree because it shows how a product is put together.
-->Modular bill of materials: build-able item that can be produced and stocked as a sub-assembly.
Many end items that are large and expensive are better scheduled and controlled as modules or sub-assemblies.
-->Super Bill of materials: includes items with fractional options: A super bill can specify for example, .3 of a part. What that means is that 30% of the units produced contain that part and 70% do not.)
Both referred to as planning bill of materials since they simplify the planning process.
1. Item master data segment: basic information describing item
2. Inventory status segment: information about part availability
3. Subsidiary data: additional information that may be useful
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