Principles of Supply Chain and Logistics Management

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Questions and Answers

What is a characteristic of independent demand?

It is a result of dependent demand

It is affected by trends, seasonal patterns, and general market conditions (correct)

It is used to determine the quantity of components and parts

It is affected by the production planning process

What is the purpose of the Aggregate Production Plan (APP)?

To determine the quantity of end items to be produced

To manage the distribution of products to customers

To construct facilities and purchase major equipment (correct)

To plan the production of components and parts

What is the difference between the Master Production Schedule (MPS) and the Aggregate Production Plan (APP)?

MPS is more detailed and has a shorter planning horizon (correct)

MPS is used for production planning, while APP is used for distribution planning

MPS is used for short-range planning, while APP is used for long-range planning

MPS is less detailed and has a longer planning horizon

What is the purpose of the Closed-Loop MRP system?

To incorporate the aggregate production plan, the master production schedule, and material requirements plan Signup and view all the answers

What is the purpose of Manufacturing Resource Planning (MRP-II)?

To incorporate the business and sales plans with the closed-loop MRP system Signup and view all the answers

What is the purpose of Distribution Requirement Planning (DRP)?

To describe the time-phased net requirements from warehouses and distribution centers Signup and view all the answers

What is the primary goal of suppliers in matching supply and demand?

To achieve optimal levels of cost, quality, and customer service Signup and view all the answers

What type of demand is described by the internal demand for parts based on the demand of the final product?

Dependent demand Signup and view all the answers

What is the potential consequence of a missed due date or stock-out in supply chain management?

Cascading effects downstream, affecting the entire supply chain Signup and view all the answers

What is the primary focus of operations managers in the hierarchical operations planning process?

Balancing capacity and output Signup and view all the answers

What is the term for the process of planning and coordinating the production and delivery of products?

Operational planning Signup and view all the answers

What is the purpose of ERP software applications in supply chain management?

To integrate all aspects of business operations Signup and view all the answers

What is the relationship between dependent demand items and the final product?

They are used in the production of the final product Signup and view all the answers

What is the result of not accurately forecasting demand in supply chain management?

Overstocking and stockouts Signup and view all the answers

What is the primary purpose of the master production schedule in the service industry?

To balance capacity with demand Signup and view all the answers

What does the multilevel bill of materials show?

The parent-component relationships and planning factor Signup and view all the answers

What is the primary purpose of the Super Bill of Materials?

To forecast end product demand Signup and view all the answers

What triggered the development of Enterprise Resource Planning (ERP) systems?

The changing business environment with multiplant international sites Signup and view all the answers

What is the primary difference between MRP and ERP systems?

ERP systems are more complex and comprehensive than MRP systems Signup and view all the answers

What was the primary limitation of MRP systems by the end of the 20th century?

They were unable to handle added tasks in a complex global environment Signup and view all the answers

What is the primary function of Materials Requirement Planning (MRP) systems?

To plan and manage purchasing, production, and inventories Signup and view all the answers

What is the Bill of Materials (BOM) in supply chain management?

An engineering document that shows an inclusive listing of all component parts and assemblies Signup and view all the answers

Study Notes

Service Industry Production Scheduling

In the service industry, the master production schedule may be an appointment log or book, ensuring that capacity (e.g., skilled labor or professional service) is balanced with demand.

Bill of Materials (BOM)

An engineering document that shows an inclusive listing of all component parts and assemblies making up the final product.
Multilevel Bill of Materials shows the parent-component relationships and the specific units of components known as the planning factor.
The multilevel bill of materials can be presented as an indented bill of materials, where each level of indentation increases by one.
Super Bill of Materials (also known as planning BOM, pseudo BOM, phantom BOM, or family BOM) enables the firm to forecast the total demand for end products.

MRP vs ERP

Materials Requirement Planning (MRP) systems were the first choice in the US for planning and managing purchasing, production, and inventories.
By the end of the 20th century, MRP systems could not handle the added tasks of international business, leading to the development of Enterprise Resource Planning (ERP) systems.
ERP systems replaced legacy MRP systems and coordinate information requirements for purchasing, planning, scheduling, and distribution in a complex global environment.

Aggregate Planning

Aggregate planning involves matching supply and demand to achieve optimal levels of cost, quality, and customer service.
Suppliers must accurately forecast demand to produce and deliver the right quantities at the right time and cost.

Hierarchical Operations Planning

Operations planning is usually hierarchical and can be divided into three broad categories:
- Long-range: Aggregate Production Plan (APP) involving the construction of facilities and major equipment purchase.
- Intermediate: Master Production Schedule (MPS) showing the quantity and timing of end items.
- Short-range: Detailed planning process for components and parts to support the master production schedule (Materials Requirement Planning - MRP).

Operations Planning

Closed-loop MRP incorporates the aggregate production plan, the master production schedule, material requirements plan, capacity requirements plan, and manufacturing resource planning (MRP-II).
MRP-II incorporates the business and sales plans with the closed-loop MRP system.
Distribution requirement planning (DRP) describes the time-phased net requirements from warehouses and distribution centers, based on customer demand minus any on-hand in-transit inventories.

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Description

Learn about the principles of supply chain and logistics management, including master production schedules and bill of materials. This quiz is based on the BSSL1208 course, Fall 2022, at UTAS.