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Chapter 14
Enterprise resource planning
(ERP)
Pearson Education Ltd. Devon Obugenga Shaw
14.1
14.2
Design
Enterprise resource
planning (ERP)
Improvement
Planning and
control
14.2
14.3
14.3
14.4
14.4
14.5
14.5
14.6
Product
Part A (2)
LT=1
Part E (2)
LT= 2
Part I (2)
LT= 2
14.6
Part B (2)
LT= 2
Part F (1)
LT= 2
Part J (1)
LT=1
Part C (1)
LT=1
Part D (1)
LT=1
Part G (1)
LT=2
Part H (4)
LT=1
(X) = quantity
Part
On hand
inventory
A
B
C
D
E
F
G
H
I
J
0
30
60
0
100
20
0
50
100
60
Order
quantities
600
600
500
600
600
500
500
500
600
600
LT = lead time
14.7
Level 0
Level 1
Box lid
10077
Level 2
Box
base
20427
14.7
Box base
assembly
10089
Inner
tray
23988
Quest
cards
10023
Character
set
10045
Dice
10045
TV label
10062
Game
board
10033
Rules
10056
TV label
10062
14.8
Product structures
A-shape
product
structure
14.8
T-shape
product
structure
V-shape
product
structure
X-shape
product
structure
14.9
Customer
orders
Master
production
schedule
Forecast
demand
Bill of materials
Material
requirements
planning
Inventory
records
Materials plans
Works orders
Purchase
orders
14.9
14.10
Forecast
demand
Sister plant
demand
R&D
demand
Master
production
schedule
Promotion
requirements
etc.
14.10
Key
capacity
constraints
Inventory
levels
Spares
demand
Safety stock
requirements
14.11
Week number
1
Demand
10
10
10
10
15
15
15
20
20
Available
20
10
10
10
15
15
15
20
20
MPS
On hand
14.11
30
14.12
Week number
1
Demand
10
10
10
10
15
15
15
20
20
Available
31
32
33
34
30
26
22
13
MPS
11
11
11
11
11
11
11
11
11
On hand
14.12
30
14.13
Week number
1
Demand
10
10
10
10
15
15
15
20
20
Sales
orders
Available
10
10
10
31
32
33
34
30
26
22
13
ATP
31
11
11
11
11
MPS
11
11
11
11
11
11
11
11
11
On hand
14.13
30
14.14
Level 0
Bill of materials
Require 20 box base
assemblies (10089)
Level 1
Bill of materials
Require 50 box bases (20467),
50 inner trays (23988) and 50
TV labels (10062)
Level 2
14.14
Inventory file
3 Board games (00289) in
stock
Inventory file
10 box base assemblies
(10089) in stock
Inventory file
15 box bases, 4 inner
trays and 65 TV labels in
stock
= re-order quantity
14.15
Closed-loop MRP
Materials plans
We wish to make
300 units per
month
Production
plan
We wish to make
7 units for day 35
Master
production
schedule
Therefore we will
need to make 5
box assemblies
for week 35
Materials
plan
14.15
Capacity plans
realistic?
Resource
requirement
plan
realistic?
Rough-cut
capacity
plan
Can we make 7
units for day 35?
realistic?
Capacity
requirements
plan
Can we make 5
box assemblies
for week 35?
Can we make
300 units per
month?
14.16
Marketing
Finance
Central
database
Design
14.16
Operations
14.17
14.18
Integrated
database
Operations
applications
Purchasing and
supply
applications
Sales and
marketing
applications
Delivery and
logistics
applications
Customers
Customers
Back-office staff
Suppliers
Financial
applications
Front-office staff
Strategic
reporting
applications
Service
applications
HRM applications
Employees
14.18
Employees