MRP in Services Operations Management Assignment Help

MRP in Services

In general, MRP systems have not made significant inroads in service operations. This is due, in part, to the belief that MRP is strictly a manufacturing tool. However, modified versions of MRP are used in service operations where an actual product is manufactured as part of the service delivery process. Examples of these quasi-manufacturing services. as
stated in an earlier chapter, include restaurants and bakeries where food is prepared on-site. In these types of service operations, the inventory management system usually consists of one or more point-of-sale (POS) terminals (or cash registers) that are connected to a central computer. This computer can be located either on-site at the retail operation or at a  remote regional or headquarters location.The POS terminals are designed for single-item pricing, where the cashier simply pushes a single key on the terminal that represents a specific item on the menu. The computer system then automatically posts the price of that item. At the same time, within the.central computer system, is the bill-of-materials (or recipe) for the item that has just been old. All of the ingredients that go into that item are subtracted out from the inventory records file. The computer inventory files are then compared against the actual physical inventories  on a periodic basis. Typically these systems have reorder points built into them that will automatically signal when a specific item is running low.Some of these service operations also use this modified MRP system to order raw  ingredients to meet future sales, in a manner similar to that of an MRP system in a manufacturing environment. First, a forecast of end items to be sold is generated (for example,  hamburgers). The forecasted demand for these items is then “exploded” against the bills of materials (or recipes) for the end items to determine the gross requirements. Finally these requirements are compared to on-hand inventories to determine the actual amounts of raw. ingredients to be ordered and the delivery dates for when they are needed.

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