Match the industry type to the expected benefits from an MRP system as High, Medium, or Low.
The manufacturing process involves lots of processes such as different types of raw materials, components, and sub-assemblies. In this, the requirements are distributed at various levels but with optimum utilization of resources with the commitment to delivery. The cost included is kept high.
Mostly it is considered that the requirement of parts is more dependent on customer specifications. The beginning level of manufacturing is done from the customer need at various levels and all these, at last, conclude high benefit in MRP.
Manufacturing of standard products such as bolts and nuts involves steel, rods, etc., and making them into end products results in high demand, and the benefits of MRP are quite low.
In this, the manufacturing is related to storing the liquid materials such as tanks for petroleum products which are only prepared on orders. This involves buying huge sheets, which ultimately results in low benefits of MRP.
Usually, the production of ships and aircraft is carried out on customer orders. It involves the high purchase of raw materials such as engines, gearboxes, and many more, which conclude high benefits of MRP.
Typically, manufacturing commodities like plastic, aluminum, steel, cement, etc., involves the purchase of standard raw material, resulting in medium MRP.
Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,000; winter, 8,000; spring, 7,000; summer, 12,000. Inventory at the beginning of fall is 500 units. At the beginning of fall, you currently have 30 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring if overtime is necessary to prevent stock-outs at the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, $100 for each temp; layoff, $200 for each worker laid off; inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour; over time, $8 per hour. Assume that the productivity is 0.5 units per worker hour, with eight hours per day and 60 days per season.
94% of StudySmarter users get better grades.Sign up for free