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Chapter 12 Question 11: briefly describe MRP II and closed-loop MRP. MRP II did not replace or improve MRP.

Rather, it expanded the scope of materials planning to include capacity requirements planning, and to involve other functional areas of the organization such as marketing and finance in the planning process. Production, marketing, and finance personnel work toward developing a master production schedule. Although manufacturing people will have a major input in determining that schedule and a major responsibility for making it work, marketing and finance will also have important inputs and responsibilities. The rationale for having these functional areas work together is the increased likelihood of developing a plan that works and with which everyone can live. Moreover, because each of these functional areas has been involved in formulating the plan, they will have reasonably good knowledge of the plan and more reason to work toward achieving it Closed loop MRP: When MRP was introduced, it did not have the capability to assess the feasibility of a proposed plan (i.e., if sufficient capacity existed at every level to achieve the plan). Thus, there was no way of knowing before executing a proposed plan if it could be achieved, or after executing the plan if it had been achieved. Consequently, a new plan had to be developed each week. When MRP II systems began to include feedback loops, they were referred to as closed-loop MRP. Closed-loop MRP systems evaluate a proposed material plan relative to available capacity. If a proposed plan is not feasible, it must be revised. The evaluation is referred to as capacity requirements planning.

Question 14: If seasonal variations are present, is their incorporation into MRP fairly simple or fairly difficult? Explain briefly. Seasonal variations can be easily incorporated into MRP as they are requirement is independent and non-lumpy. Independent demand can be ordered on a continual basis. Question 15: How does the purpose of ERP differ from the purpose of MRP II? ERP is just Like MRP II, it typically has an MRP core. ERP represents an expanded effort to integrate standardized record keeping that will permit information sharing among different areas of an organization in order to manage the system more effectively. Question 16: What are some unforeseen costs of ERP? 1. Training. 2. Integration and testing. 3. Data conversion. 4. Data analysis. 5. Consultants ad infinitum. 6. Replacing your best and brightest. 7. Implementation teams can never stop. 8. Waiting for ROI. And the project team is not going to be rewarded until their efforts pay off.

Chapter 15 Question 5: What is the bullwhip effect, and why does it occur? How can it be overcome? Variations in demand at the consumer end of a supply chain tend to ripple backwards through the chain. Moreover, periodic ordering and reaction to shortages can magnify variations, causing inventories to oscillate in increasingly larger swings. This is known as the bullwhip effect, because the pattern of demand variation is analogous to the motion of a bullwhip response to slight jerking of the handle. Consequently, shortages and surpluses occur throughout the chain, resulting in higher costs and lower customer satisfaction, unless preventive action is taken. The causes of inventory variability can be not only demand variability but also factors such as quality problems, labor problems, unusual weather conditions, and delays in shipments of goods. Adding to this can be communication delays, incomplete communications, and lack of coordination of activities among organizations in the supply chain. Good supply chain management can overcome the bullwhip effect by strategic buffering and inventory replenishment based on needs. An example of strategic buffering would be holding the bulk of retail inventory at a distribution center rather than at retail outlets. That way, inventories of specific retail outlets can be replenished as needed based on point-of-sale information from retail outlets as well as information on retail outlet inventories. Question 9: What impact has e-business had on supply chain management? e-Commerce has had a profound impact on the supply chains of many products. Clearly, the supply chains of information goods have seen the most change (for example, see Dewan, Freimer, Seidmann (2000)). Manufacturers of physical products have also turned

to the Internet as a direct channel of distribution. The direct channel poses a different set of decisions and challenges from those in the existing bricks-and-mortar retail channel. These two channels differ in customer types, operations of order fulfillment, cost Structure, profit contributions, priority in rationing, logistical requirement, expectations of Service quality, degree of market segmentation, access to demand/supply information, And returns policies. Question 11: What are some of the trade-offs that might be factors in designing a supply chain? Lot size-inventory trade off, Inventory-transportation cost trade-off, Lead time-transportation trade-off, Product variety-inventory trade-off, Cost-customer service trade-off