3. Describe aggregate production planning, master production planning, material
ID: 1143374 • Letter: 3
Question
3. Describe aggregate production planning, master production planning, material requirement planning, and distribution requirements planning. How are these plans related?
4. Describe how MRP evolved into close-looped MRP, MEP-II, and eventually into ERP.
The bill of materials for product A with the associated component parts and planning factors (in parenthesis) are showed below. How many units of the following components are required to make one unit of the product A?
(A) Component B
(B) Component C
(C) Component D
(D) Component E
(E) Component F
(F) Component G
(A) Component B
(B) Component C
(C) Component D
(D) Component E
(E) Component F
(F) Component G
Explanation / Answer
Aggregate production planning:
It is a concept of operations management. It is a concept required to determine the levels of production, inventory and personnel to fulfill the demands of the consumers. This planning varies from 6 months to a year. The perspective of planning ranges over the period.
This planning helps to exploit workforce in the most appropriate manner possible and represent a very important part of operations management. It helps to match demand and supply while reducing the costs.
Master production schedule:
It is schedule prepared for individual commodities to be produced during the decided time period. It is plan of when and how much of the product is demanded and accordingly produced. It is a statement prepared by the company in order to determine the production of the individual product. It states processes, parts and resources to optimize the production.
Material requirement planning:
It is a production planning and scheduling and the inventory management system which is used to manage the manufacturing process.
It has the below objectives:
Availability of material for production
Availability of products to consumers
To maintain the lowest level of material and products
To plan manufacturing activities
To determine the delivery schedules
To state the purchasing activities
Distribution requirement planning:
It is method to have a systematic process for delivery of goods in a more efficient way. It also determines the quantity and location which is required to forecast the demand. The main aim of this planning is to minimize the shortage and reduce the costs or order, transport and handling inventory.
Relationship:
These plans are related to each other because they determine an appropriate plan of production in the firm which manufactures the products. These plans are a part of business plans which are related to the material planning for the manufacturing firms. These plans are related to time factors majorly.
MRP evolved into closed-looped MRP, MRP-II and eventually into ERP:
The material requirement plan changes the end item from the Material Requirement schedule to time barred components. Then, Material Resources Planning incorporates in itself, the Aggregate production planning, Material production schedule and the material requirement planning. Then, it generates an extension of the Material resource planning-II system in the enterprise. And this develops an enterprise resource planning system for the firm.
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