AND ANSWERS | WITH COMPLETE SOLUTION
Aggregate Production Plan Answer - -Aggregate plan for the production
process. Measures what quantity of materials and other resources are to be
procured and when. Time frame (at least one year usually rolled forward by 3
months every quarter)
Master Production Schedule Answer - -A detailed dis aggregation of the APP,
listing the exact end items to be produced in a specific period. More detailed
than APP (shows all items produced). Time frame (shorter planning horizon,
but longer the lead time to produce an item)
Materials requirement Plan Answer - -Computer based, calculates exact
quantities, need dates, and planned order releases for sub assemblies &
materials required to manufacture a final product. Requires independent
demand information, parent-component relationships from the BOM, LFL-
order what you need.
Chase strategy Answer - -Adjust capacity to match demand. (Adv) works well
for make to-order-firms. Finished goods inventory is constant. (Dis) Hire and
layoff workers (time and money to train).
Level strategy Answer - -Constant output rate, regardless of demand. (Adv)
works well for make-to-stock firms. Constant output, don't need to hire/lay off.
, (Dis) Finished goods inventory and backlog vary. Relies on how accurate the
forecast is.
Mixed Strategy Answer - -Combination of both chase and level strategies.
(Adv) maintain a stable, core workforce. (Dis) Use short-term means: overtime,
contractors, temps to manage short-term demand costs money.
Time Fence MPS Answer - -necessary because of system nervousness -small
changes in the upper-level production plan cause major changes in the lower-
level production plan. Firms use a time fence to deal with nervousness by
separating the the planning horizon.
Independant Demand Answer - -Forecast demand for final products affected
by trends, seasonal patterns, general market conditions (computers, pizza,
bicycles)
Dependent Demand Answer - -the internal demand for parts based on
independent demand of the final product in which the parts are used (sub-
assemblies) (microchips for computers, cheese on pizza, wheels on bicycle).
Relationship comes from BOM.
Bill of Materials (BOM) Answer - -document that shows a listing of all
component parts and assemblies making up the final product. Determines the
dependent demand for components. Planning factor, how many components
do you need? What materials go into the final product?
Purpose of MRP Answer - -integrates data from production schedules with that
form of inventory and the BOM to calculate purchasing and shipping schedules
for the parts or components.