You have been hired as a consultant for a company that wants to manufacture high (15/20) -- Operations Management

You have been hired as a consultant for a company that wants to manufacture high-end bicycles. The owners of the new business have designed a bike that can be sold to cyclists that choose to compete. They have asked you to provide an evaluation and recommendation of the best manufacturing process. Use the information from this unit to write a recommendation to the owners. Include support for your choices. 3.5: Process Selection ids355: Operations Management Wikispace: “Chapter 14, Summary: MRP and ERP Review the information related to the use of manufacturing resource planning and enterprise resource planning. Both are useful within the organization. Resources are necessary to successful operations. One challenge that every manager faces is the decision of resource utilization. Pay attention to the benefits and requirements. Review the questions at the end of the summary. After answering the questions, compare your answers to the author’s answers. Chapter 14: MRP & ERP MRP Items with dependent demand are items in which demand is derived from plans to make certain products (things like raw materials, parts, and assemblies). Example: The parts and materials that go into the making a car. Dependent demand tends to be “lumpy” whereas independent demand is fairly stable. MRP is a computer program that translates finished product requirements into time-phased requirements for each dependent demand items. The Bill of Materials, one of the three primary inputs of MRP, is useful because it is a list of all the assemblies, sub-assemblies, parts, and raw materials that are needed to produce one unit of a finished product. In addition to MRP, this chapter provides information about ERP, which has an MRP core. ERP, which stands for “Enterprise Resource Planning” provides an expanded effort to integrate standardized record keeping that will permit information sharing among numerous dimensions of a business in order to direct the system more effectively. An ERP system typically has modular hardware and software units and “services” that communicate on a local area network. An important issue in inventory management is determining a lot size to order or produce in independent and independent demand items. Lot sizing refers to choosing a lot size for ordering or production. For independent demand items managers use economic order sizes and economic production quantities. For dependent demand systems managers can choose larger variety plans to determine the lot sizes. Dependent demand tends to be sporadic or “lumpy”. The goal of independent demand and dependent demand systems is to minimize the sum of ordering cost and holding cost. MRP Input MRP uses three primary sources for information: master schedule, bill-of-materials file, and an inventory records file. Master schedule relates to product demand and timeline. It states what end items need to be produced, when they are needed and how much are needed. Bill of materials relates to product composition. It lists