Operations managementLesson 2 of 3 in the course Achieving World-Class Operations Management

Production Resource Planning, Inventory, and Digital Supply Chains

5 flashcards · 5 quiz questions · 5 match pairs · 4 fill-in sentences · English

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Summary

Resource planning ensures that the materials, parts, equipment, and labor needed for production are available when they are needed. Because inputs can account for a substantial share of a product’s cost, planning these resources affects both reliability and profitability.

Resource planning begins by determining which inputs a product requires and when they must be available. A firm first forecasts the quantity of finished goods it expects to produce. It can then calculate the resources needed to support that production.

All flashcards

Make-or-buy decision
The choice between producing an input internally and purchasing it from an outside source.
Inventory management
The process of controlling stock levels and managing inventory ordering, receiving, storage, and tracking.
Materials requirement planning (MRP)
A computerized system that coordinates production materials, labor, and equipment against a production schedule.
Supply-chain management
Coordinating activities along the supply chain to improve flow and deliver quality products and services.
E-procurement
The process of purchasing supplies and materials through online systems.

Quiz questions

  1. What does manufacturing resource planning II (MRPII) add to materials requirement planning (MRP)?Answer: It integrates planning information across multiple internal departments.
  2. What distinguishes enterprise resource planning (ERP) from systems focused mainly on internal production planning?Answer: ERP provides a unified platform that can include supplier and customer information.
  3. How does a reverse auction typically work in procurement?Answer: A buyer posts specifications, and potential suppliers bid against one another.
  4. What is electronic data interchange (EDI)?Answer: The electronic exchange of information between trading partners.
  5. What is a central aim of supply-chain management?Answer: Coordinating activities along the chain so customers receive quality products and services.

Based on Introduction to Business 2e by Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.

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