Type:
Solution Manual
Manufacturing Planning and Resource: Control for Supply Chain Management Edition:
6th Edition
Author(s):
F. Robert Jacobs William Lee Berry David Clay Whybark Thomas E. Vollmann
Chapter 1 Solution Manual
CHAPTER 1 Solution Manual Discussion Questions 1. The intent of this question is to get the student to think about timing issues. The first of these issues is that the process of direction setting, planning, and execution all go on simultaneously. The distinction is that the direction setting and future planning may be for products that have not yet even been designed, while the detailed material and capacity planning is for products that will be made in the very near future, and the execution activities are for producing products that were planned some time ago. It is very difficult for the students to get that timing sequence down. Their examples should clearly illustrate they understand that the planning taking place today is for products that will be produced in the future. 2. Taken from the student's perspective, the breakdown is: major (front end), courses and sequence (engine) and performance (back end). Once the major is planned, a schedule of courses is required. This MPS is exploded into classes by term (frozen in the short run). The shop floor system monitors and adjusts for changes like failing, dropping courses, or having courses canceled. 3. This is obviously a question designed to let the class run loose. Among the things that they may come up with are: the population explosion, advances in information technology, new production technology, the emergence of China, developments in theory, and new organizational innovations. 4. Before asking questions, lash her soundly. She should be focusing on what type of business the company is in and what processes are used. Why is she going straight to software and system choice? This chapter stresses the need to fit the system to the needs of the firm, market and supply chain partners. Has she determined the specific tasks that need to be performed to do any of this? Only after she has worked on defining the MPC needs of the firm can she select the software and system choice.
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Chapter 01A Solution Manual
CHAPTER 1A Solution Manual Discussion Questions 1. Essential attributes of ERP systems are the following: (1) multifunctional in scope, (2) integrated in that when a transaction or piece of data representing an activity of the business is entered by one of the function, data regarding the other related function is changed as well, (3) the software is modular in structure, and (4) the software much facilitate manufacturing planning and control activities including forecasting, production planning, and inventory management. 2. Processes probably do need to be reengineered accommodate a new ERP system since functions can change significantly due to the processes needed to support the new system. It is important, though, that the competitive impact of making the change be considered. Is the new system actually an improvement over the old system? This may or may not be true depending on the case at hand. 3. Real-time data allows the exact status of customer orders and the activities critical to the success of the firm to be determined at any time. It’s important to recognize, though, that reacting to short term changes can often be quite disruptive. A good plan should be robust relative to short term changes in demand and supply and this should be a real goal in making the best use of information from an ERP system 4. Comparing the offerings from SAP, Oracle and PeopleSoft is a good exercise for the students. These websites change often based on the marketing emphasis that each company is pursuing. Actually, major changes in the underlying software does not occur very frequently, possibly on every 10 years. The software is constantly being repackaged, though. These companies are also continually developed very specialized applications often directed at specific industries. These applications will be advertised on the websites as well. 5. i2 Technologies is well known for advanced forecasting, bottleneck scheduling (shop level) and advanced logistics applications (truck loading, vehicle routing).
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Chapter 01A Solution Manual
Chapter 1A Problem Summaries Problem Difficulty 1 2 3 4 5
Easy Hard Moderate Easy Easy
6 7 8 9 10 11 12 13 14 15
Moderate Moderate Moderate Moderate Moderate Moderate Moderate Easy Easy Moderate
Problem Type Cash-to-cash cycle time calculation. Cash-to-cash cycle comparison using data from the Internet. Cash-to-cash cycle time sensitivity analysis. Labor requirements analysis. Sensitivity analysis using ERP data. Problems 6-12 are extensions that explore the use of ERP type data. Extension of #5. Labor requirements – extension of #4 and #5. Extension of #7. Extension of #8. Extension of #9. Extension of #10. Extension of #11. Benchmarking problem. Benchmarking comparison between firms. Eli Lilly analysis of the value of reducing inventory level through the use of an ERP system.
1. Sd = S/d ARd = AR/Sd Cd = Sd * (COS/S) Id = I/Cd APd = AP/Cd
= 8028 / (13 weeks * 7 days) = 2689 / 88.22 = 88.22 * (6580 / 8028) = (126 + 224) / 72.31 = 4326 / 72.31
= 88.22 M per day = 30.48 days = 72.31M = 4.84 days = 59.83 days
Cash to Cash Cycle Time = 30.48 + 4.84 – 59.83 = -24.51 days
2. Calculations are similar to what is given in problem 1. This is an interesting comparisons that can generate good discussion about how these companies operate differently. 3. Reduction in cost-of-goods sold. This should improve cash-to-cash cycle time. More frequent deliveries from suppliers. Improve cash-to-cash cycle time. Reductions in time customers are allowed to pay for goods. Improve cash-to-cash cycle time. Change from paying suppliers on receipt of goods to waiting 60 days to pay suppliers. This should improve cash-to-cash cycle time. Write-off of obsolete inventory. Improves cash-to-cash cycle time. Reduction in labor content in a production process. Improves cash-to-cash cycle time. Outsourcing the production of a major product. Improves cash-to-cash cycle time.
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Chapter 01A Solution Manual
4.
2300/60 = (38.33 hours) / 5 hours per student ≈ 8 part-time college students
5.
(2100 x $2.00) – (2300 x $1.25) = $1325. (1500 x $2.00) – (2300 x $1.25) = $125.
6.
There would be no discarded sandwiches in either case, since the next day all could be sold. But it does require the sellers to use up the old inventory first. Ajax would need a linkage to each selling site to know how many less sandwiches to send each day (i.e., gross-to-net).
7.
500 x .9 x .9 = 405 roast beef plus 500 + (500 – 405) * .5 or 547.5 tuna – in round numbers 400 roast beef and 550 tuna or 950 total sandwiches.
8.
About 50 (1000 – 950) sandwiches at a margin of $0.75 ($2.00 - $1.25) = $37.50
9.
Monthly delivery savings = 3 x $20 = $60 ($720/year). Cost of capital tied up in customer inventories is about 1 to 3 weeks of stock (say 2 on average) =$200 x 15% = $30.
10.
The master production schedule for assembling sandwiches could be used to determine the forward need (forecast) of peanut butter requirements. It could also be used for payments – assuming the schedule is actually achieved. Another potential source of information for payments could be the actual build results – perhaps coming from labor reporting in the HR systems. Additionally, there would probably be information in the sales units for shipments to the various outlets that could be used. If the payment was based on actual end item sandwich sales then it would be necessary to connect to the selling unit to the detailed sales analysis. A problem here is that the supplier should also be paid for sandwiches not sold. It would also be necessary to periodically reconcile the inventories in both companies.
11.
There are half of the varieties (12) that have 5% leftover on any day so 5% (leftover) * 20 (sandwiches per day) * 12 (varieties) * 50% (half that have excess) = 6 leftover sandwiches each day (tossed out?). Additionally the 2 best sellers could have 10% (.10 x 20) more = 2 each, so we could sell 4 more sandwiches (2 sandwiches * 2 varieties). These four could be made from the read of the 6 leftovers loaves – only tossing out 2 (6 4) loaves of bread. 1-3