What are three advantages of using an MRP system?
What will be an ideal response?
Answer: The text lists these three benefits of MRP:
MRP is directly tied to the master production schedule and indicates the exact timing and quantity of orders for all components. By eliminating a lot of the guesswork associated with the management of dependent demand inventory, MRP simultaneously lowers inventory levels and helps firms meet their master schedule commitments.
MRP allows managers to trace every order for lower-level items through all the levels of the BOM, up to the master production schedule. This logical linkage between higher and lower levels in the BOM is sometimes called the parent/child relationship. If for some reason the supply of a lower-level item is interrupted, a manager can quickly check the BOM to see the impact of the shortage on production.
MRP tells a firm and its suppliers precisely what needs to be made when. This information can be invaluable in scheduling work or shipments, or even in planning budgets and cash flows. In fact, MRP logic is often called the "engine" of planning and control systems. MRP plays a big part in many enterprise resource planning (ERP) systems, described in the supplement.
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All of the following are disadvantages of the test data technique except
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a. differentiating b. circumscribing c. stagnating d. avoiding
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