12 Questions
What is the primary function of a firm planned order in MRP planning?
To override the MRP system's ability to change the order
When are firm planned orders typically utilized?
Within the planning time fence by lower-level firms and closer-tiered vendors
What can firm planned orders signal for?
For purchasing to order parts and/or production
Which scenario may cause a planner to use firm planned orders as a 'safety net'?
A seasonal, low-usage capacity event
What can a firm planned order ensure regarding the production line?
That the production line will be diverted to another product
What distinguishes a planned order from a firm planned order?
Planned orders can be adjusted by the MRP system
What action does a planner take when they use a firm planned order?
Firming the order by overriding the MRP system
Within what interval are lower-level firms and closer-tiered vendors most likely to use firm planned orders?
Within the planning time fence
What might a planner do in response to seasonal fluctuations?
Order extra inventory
How can firm planned orders help avoid potential production issues?
By postponing other orders
Which key element is involved in the distinction shown in Exhibit 4-61?
Planned order changes
What is the purpose of using a firm planned order as a 'safety net'?
To ensure production can be diverted when necessary
Study Notes
Firm Planned Orders
- A firm planned order is a way for the MRP planner to override the MRP system's ability to change the planned order.
- Firming the order allows the planner to take control of the order and prevent the MRP system from making changes.
- Lower-level firms and closer-tiered vendors within the planning time fence often use firm planned orders.
- Firm planned orders serve as a signal for purchasing to order the required parts and/or production.
- They can also be used as a "safety net" in response to seasonal or low-usage capacity events.
- For example, a planner may use firm planned orders to ensure production line capacity during peak sales periods.
Distinction between Planned Orders and Firm Planned Orders
- Planned orders can be changed by the MRP system.
- Firm planned orders are fixed and cannot be changed by the MRP system.
- The planner has the ability to override the MRP system's changes when using firm planned orders.
- Scheduled delivery dates are ahead of the planned order date in the case of firm planned orders.
Firm Planned Orders
- A firm planned order is a way for the MRP planner to override the MRP system's ability to change the planned order.
- Firming the order allows the planner to take control of the order and prevent the MRP system from making changes.
- Lower-level firms and closer-tiered vendors within the planning time fence often use firm planned orders.
- Firm planned orders serve as a signal for purchasing to order the required parts and/or production.
- They can also be used as a "safety net" in response to seasonal or low-usage capacity events.
- For example, a planner may use firm planned orders to ensure production line capacity during peak sales periods.
Distinction between Planned Orders and Firm Planned Orders
- Planned orders can be changed by the MRP system.
- Firm planned orders are fixed and cannot be changed by the MRP system.
- The planner has the ability to override the MRP system's changes when using firm planned orders.
- Scheduled delivery dates are ahead of the planned order date in the case of firm planned orders.
Learn about firm planned orders, a way to override the MRP system's ability to change planned orders, and how they are used in purchasing and production.
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