Part 1: Many practitioners currently update MRP weekly or biweekly. Would it be more valuable if it were updated daily?

 Discussion topic and question (just a few paragraphs are required, doesn’t need to be too long)

Part 1: Many practitioners currently update MRP weekly or biweekly. Would it be more valuable if it were updated daily? Discuss the pros and cons of updating daily versus updating weekly or biweekly.

Part 2: In an agreement between a supplier and a customer, the supplier must ensure that all parts are within specification before shipment to the customer. What is the effect on the cost of quality to the customer? What would be the effect on the cost of quality to the supplier?

Respond to two peers discussions below (just need a few sentences in the response)

Peer 1

In chapter 9 of our book it says that the material requirements planning (MRP) closely interacts with inventory records, output reports, bill-of-materials file, and the master schedule. Each organization would have different demands on when they should update their MRP. There is an advantage to updating weekly and that is only if the organization does not have variations through the week. Disadvantages of updating weekly is floating holidays change every year and a variable would have to be created to get the correct estimate for the coefficients for the weeks of the holidays. The number of weeks in the year change, every year does not have 52 weeks.  

In an agreement between supplier and customer, the supplier must make sure that all parts of the product are correct and working properly. The effect on the cost of the customer would increase some for the best quality of the product. Every small part on the product would have to be checked and if it falls out of the specifications then the part would have to be replaced. Each person that checked every little part would have to get paid for their part in the process so the price would be higher for a high-quality product. The cost for the supplier would be the cost to each person that quality inspects each product. The supplier would have to pay each inspector for their part in the high quality. So, the extra money that the customer would pay just goes into employees’ paychecks.   

Reilly, Tom. Advantages and Disadvantages of using Monthly, Weekly, and Daily Data. 5 March 2013. Retrieved on 3 February 2020. https://www.autobox.com/cms/index.php/blog/entry/advantages-and-disadvantages-of-using-monthly-weekly-and-daily-data

Peer 2:

The performance of any operation will naturally vary day to day. When the observed time frame in which performance is measure in a week or two, the daily variation are averaged. An example would be a below average performance in one day being offset by a higher than average performance the next day. Daily MRP can create an exception report calling a normal variation an abnormal deviation from expected output.  MRP should be updated weekly/biweekly depending on how your organization planning strategy is formed either on MTS or MTO. If your organization follows pure MTS with small variations in products then biweekly MRP updates would be suitable. But if the organization follows pure MTO with lot of variations in products daily would be a better choice. But you must be careful considering it can create a exception report.  A pro and con to the daily updates help keep inventory levels low. However, daily updates also can be time consuming and do not give long range planning for future material needs. So it really depends the type of planning strategy and size of your organization is. 

If the agreement between a supplier and the customer must ensure that all parts are within specification before shipment to the customer then more than likely the supplier will have to pay more focus on his process and ensure that each and every part which is produced is within specification will increase the cost of the quality of the part for both supplier and customer. This allows the customer to focus attention on quality improvements within their own process requiring an increase in prevention cost. Once prevention programs are in force, scrap, repair, rework, and downtime costs will draw even further because of improvements in the product and the process. Ultimately, we would expect the disagreements to lower the total cost of quality for the customer. Now if we take the customers process on an overall basis we will find that they can focus entirely on the internal process where same part is used and improved the quality there by reduce rejects, scraps etc. If we see an overall basis the cost savings is huge for the customer provided they do not give an overboard increase on account of quality. 

ANSWER

Part 1

The number of times the MRP ought to be updated depends on the planning strategy of any organization. Therefore, both options (weekly or biweekly) are viable. Furthermore, undertaking an MRP is based on either period will have both advantages and disadvantages, and hence it is up to an organization to weigh the two and pick one that is more advantageous. Updating daily is advantageous as it takes care of the variations that come up during the week. Such variations can be averaged for an organization to capture weekly demands from customers. It is, however, disadvantageous as it is bound to experiencing abnormal variations from expected output. Furthermore, daily updates may mean the system will have to be adjusted many times to cater for day to day demands of customers.

Part 2

In a supplier-customer agreement, the supplier must ensure that all components of any product which is to be shipped are not only the right ones but also in good condition. By checking every component and ensuring that it meets the quality desired by the customer, the cost of inspection and the quality of components will have to be included in the final price of the product. The supplier, on the other hand, may not necessarily feel the cost since all costs of inspection and the best products will just be transferred to the customers. The seller only incurs the cost of time used in double-checking the validity and quality of the product.

Review of the peer 1

In part 1, the author correctly responds that an MRP will be updated based on the organization’s demands. The author, however, does not explain the advantages/disadvantages of biweekly updates. For the weekly updates, he notes that if there are no variations, for instance, weekly updates will have an advantage. The disadvantage, however, is that there exist floating holidays that may bring inconsistency. For the second part, the author explains that the customer will bear the cost of the product quality as well as the cost of the inspection. For the supplier, the cost will be on employees used to undertake an inspection.

Review of peer 2 For part 1, the author explains that an MRP will vary. It can thus be evaluated either weekly or biweekly, depending on the planning strategy…