Production and Operations Analysis, Seventh Edition
Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 8, Problem 44AP
Summary Introduction

Interpretation:Discuss the ‘target’ of zero in-process inventory and explain why it is not feasible in spite of the MRP systems in place.

Concept Introduction:

Work in process inventory is supposed to serve the same purpose as the RM and the FG inventory i.e. a buffer against variations in all the related activities/sub-processes. The variation may be on the supply side or the demand side.

MRP is a system for steady demand scenario and aim at planning and scheduling all related supplies at the right time with optimum costs and optimum inventories.

The lot by lot system means the material movement at every process/sub-process is in a lot and not as a single piece.

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