KEY TERMS

Dependent Demand (575): Demand for items that are subassemblies or component parts to be used in the production of finished goods.

Material Requirements Planning (576): Computer-based information system that translates master schedule requirements for end items into time-phased requirements for sub-assemblies, components, and raw materials.

Master Schedule (577): One of three primary inputs in MRP; states which end item are to be produced, when these are needed, and in what quantities.

Cumulative Lead Time (578): The sum of the lead times that sequential phases of a process require, from ordering of parts or raw materials to completion of final assembly.

Bill of Materials (BOM) (578): One of the three primary inputs of MRP; a listing of all of the raw materials, parts, sub-assemblies, and assemblies needed to produce one unit of a product.

Product Structure Tree (578): Visual depiction of the requirements in a bill of materials, where all components are listed by levels.

Inventory Records (581): One of the three primary inputs in MRP; includes information on the status of each item by time period.

Gross Requirements (582): Total expected demand for an item or raw materials in a time period.

Scheduled Receipts (582): Open orders scheduled to arrive from vendors or elsewhere in the pipeline.

Projected On Hand (582): Expected amount of inventory that will be on hand at the beginning of each time period.

Net Requirements (582): The actual amount needed in each time period.

Planned-Order Receipts (582): quantity expected to be received by the beginning of the rime period in which it is shown.

Planned-Order Releases (582): Planned amount to order in each time period; planned-order receipts offset by lead time.

Pegging (586): The process of identifying the parent items that have generated a given set of material requirements for an item.

Regenerative System (588): Approach that updates MRP records periodically.

Net-Change System (588): Approach that updates MRP records continuously.

Planned Orders (588): Schedule indicating the amount and timing of future orders.

Order Releases (588): Authorization for the execution of planned orders.

Changes (588): Revisions of due dates or order quantities, or cancellations of orders.

Performance-Control Reports (588): Evaluation of system operation, including deviations from plans and cost information.

Planning Reports (588): Data useful for assessing future materials requirements.

Exception Reports (588): Data on any major discrepancies encountered.

Lot Sizing (589): Choosing a lot size for ordering or production.

Manufacturing Resources Planning (MRP II) (591): Expanded approach to production resource planning, involving other areas of a firm in the planning process and enabling capacity requirements planning.

Capacity Requirements Planning (593): The process of determining short-range capacity requirements.

Time Fences (593): Series of time intervals during which order changes are allowed or restricted; the nearest fence is most restrictive to change, the farthest is least restrictive.

Load Reports (593): Department or work center reports that compare known and expected future capacity requirements with projected capacity availability.

Enterprise Resource Planning (ERP) (595): Integration of financial, manufacturing, and human resources on a single computer system.