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 MRP Inventory and Customer Service

Guided Response: Respond to at least two of your classmates’ posts. Include additional improvements and/or challenges if MRP is appropriate. Include reference

Federico’s Post:

MRP Inventory and Customer Service

          Companies are always trying to manage their raw materials stock levels through inventory control systems. Such systems track materials from when bought, in stock to their final destination to customers. An inventory control system monitors materials’ movement, usage, and storage. Inventory levels must be managed to ensure that organizations are keeping the optimal amount of each product. Inventory is created to serve customers’ demands. According to Vonderembse & White (2013), “Dependent demand is usually demand for an item that is generated by a company’s production process” (chap. 9.5). Material Requirements Planning (MRP) is the system companies typically use to manage inventory for dependent demand items.

          An MRP inventory control system can set reorder points and keep track of the company purchase orders to maintain a functional supply chain. Modern companies use MRP computerized systems, which need production data to generate the right inventory control decisions. Vonderembse & White (2013), states that “The three most crucial data requirements of MRP are the master production schedule, bill of materials, and inventory records” (chap. 9.5). The ultimate goal of using MRP is to maximize the company’s profits while the least amount of inventory possible is sitting in the warehouse. Organizations must do this without compromising customer satisfaction. So, using MRP, the company will place purchase orders for materials and parts to arrive in time to meet the requirements of the master schedule. This way, the company will reduce the number of its items in inventory. By adequately planning the purchasing process with MRP, the company will acquire the components needed to meet the demand of its products, thus avoiding potential delivery delays to customers. Delivering products on time will improve the company’s customer service level.

          MRP software can be a great option when organizations struggle with multiple manufacturing process elements. Many companies have implemented an MRP system, and it has benefitted their businesses in different ways. Bland (2021), mentions three companies that have implemented an MRP system. One of them is Northvale Korting (UK), which produces control valves for the automotive, petrochemical, marine, nuclear, water treatment, oil & gas industries.

References

Vonderembse, M. A., & White, G. P. (2013). Operations management. Bridgepoint Education.

Bland, A. (2021, August 10). 3 Companies Using an MRP System. Unleashed Software. 
https://www.unleashedsoftware.com/blog/3-companies-using-an-mrp-system (Links to an external site.)

 

Vincent’s Post;

Hello Class,

Material requirements planning, or MRP, is an inventory system used for calculating materials required and components needed in order to manufacture a product. The MRP takes into calculations two main parts; the master schedule file and the bill of materials file. As stated by Vonderembse & White (2013), “For MRP purposes, the master schedule is what “drives” the system and generates material requirements.” Depending on what the company is manufacturing, the master schedule file may take place during the finished-products level or at the level of components and subassemblies. The bill of materials file is what is used when determining what components of a product are requires and also the quantities of those components in order to make the product.

The primary goal of MRP is to make sure that materials and components are ready and available when they are needed during the production process and the manufacturing takes place on a strategic schedule. Ineffective inventory management can lead to higher inventory costs. Implementing MRP can decrease unnecessary inventory levels while also efficiently manufacturing products. When products are manufactured efficiently and in a timely manner, the customer benefits because they can rely on you and they don’t have to deal with inconvenient out of stock or delivery issues.

I work in retail and for a large corporation department store. Our systems are constantly analyzing inventory data and determining what is sold, what is on-hand, and what is needed in order to replenish products appropriately while also avoiding having too much inventory of a single product. While this might be a slightly different type of inventory management due to us not actually manufacturing products, it has a similar concept.

 

Vonderembse, M. A., & White, G. P. (2013). Operations management [Electronic version]. Retrieved From https://content.ashford.edu/books/AUBUS644.13.2/sections/sec9.5

Perpetual versus Periodic Inventory Systems

Guided Response: Respond to at least two of your classmates’ posts. Rationalize or challenge opinions of others. Include alternate opinions, ideas, and/or additional aspects and considerations. Include reference

Zachary’s post:

The perpetual inventory system continuously inventories levels (Vonderembse & White, 2013, section 10.2), while the periodic inventory system examines the levels on a specific date and time (Vonderembse & White, 2013, section 10.2). Neither system is better than the other but as used in different ways. For example, at the company that I work for, the office supplies are inventoried every other Wednesday and stock is delivered the following on day. Order levels have been determined and once the quantity goes below that level stock are ordered to replenish. This system works well because there is typically not a need for large amounts of office supplies.

My wife works for FYE, a music and entertainment store, in the local mall. Their inventory is in a point-of-sale system and uses the perpetual inventory system. Once a DVD is purchased by a customer, the company’s warehouse is notified instantly via computer notification and a determination is made (also, instantly) on whether or not to send a new copy back to the store. This system connects his store with all the stores in the company. When there is an increase in sales area, the computer system sends additional copies to the store that has sold the originals as well as the surrounding locations. Both inventory systems are useful in their respective application. The firm would never need to have continuous review of its office supply level and FYE would never able to place inventory orders every other week. The key to operating a success inventory system is to understand which one fits the organizations needs best.

Reference

Vonderembse, M. A., & White, G. P. (2013). 

Operations management

 [Electronic version]. Retrieved from https://content.uagc.edu/

Melissa’s Post:

A perpetual inventory system continuously monitors inventory levels. It is also known as a continuous review system (Vonderembse and White, 2013). This type of inventory systems tracks inventory as it is used. In the past, when inventory levels were small, the process was done by hand. This is something that still happens through either bi-annual or annual inventory processes that companies do with certain lines of their inventory to maintain the accuracy of their systems. The inventories in a perpetual inventory system are typically tracked via computers for transactions in and out of the business. The computer systems track these inventories by a bar code that either uses a part number or SKU (stock keeping unit) identifier that the system uses to reorder products. The reorder point is typically predetermined and when the inventory drops to that level the system will reorder to replenish quantities that are needed. This system is best suited for large retailers, warehouses, cellphone companies, or any other businesses that have inventories spread out all over the place.
A periodic inventory system is a system that records inventory purchases at specific time intervals and does not keep a continuous, real-time record of on-hand inventory levels or products sold to customers. Vonderembse and White (2013) state that when a company does not know the level of inventory or when the supplier will only deliver at a specific time then it is at that point the periodic system should be used. This system can be used by small, private retailers, gas stations for recording fuel purchases and reorders/deliveries, and bars for purchases and reorders as well.
The main way that these two systems differ is that the perpetual system is a continues count of on-hand inventory while the periodic system is a count of on-hand inventory at specified times and amounts. Another way in which these two systems differs is in there accounting methods. The perpetual system continuously updates its systems as inventory transactions occur. In the periodic system, there is no cost of goods sold entry at all during an accounting period until such time as there is a physical count, which is then used to derive the actual cost of goods sold (Bragg, 2017).
Determining which system to use can be a daunting task but the size of the inventory level on hand should make this relatively easy. A larger inventory would be best suited for the perpetual system whereas a small inventory would be best suited for the periodic system. The primary case where a periodic system might make sense is when the amount of inventory is very small, and where you can visually review it without any particular need for more detailed inventory records. The periodic system can also work well when the warehouse staff is poorly trained in the uses of a perpetual inventory system since they might  inadvertently record inventory transactions incorrectly in a perpetual system (Bragg, 2017).

References:
Bragg, S. (2017, August 2). The Difference Between the Periodic and Perpetual Inventory
Systems. Retrieved from 
https://www.accountingtools.com/articles/what-is-thedifference-between-the-periodic-and-perpetual-in.html (Links to an external site.)

Vonderembse, M. A., & White, G. P. (2013). Operations management [Electronic version].
Retrieved from https://content.ashford.edu/

Discussion

Funding for Grants

· Points you receive on discussions will reflect the quality of your initial post and responses.

· Ask at least one question in response to an original peer post that you would like the author to explore further.

· Support your initial and subsequent posts by citing at least two academic resources, preferably from the Ashford University Library.

Please respond to at least two of your classmates by Day 7 with your responses being approximately 75-100 words in length.

Carmen’s Post:

Funding for Grants

When grants are requested organizations need to comply with the rules and regulations. According to Pasachoff (2020), “Federal grants are one of the government’s most important policy tools” (p.573). Making sure that what was granted is utilized effectively and as stated in the grant proposal is essential. Any misuse of funds can result in payback, discontinuation of funds and/or legal issues. According to Charbonneau & McGlone (2013) many individuals do not understand the policies and compliance obligation with the National Institutes of Health (NIH). As in the scenario provided above Dr. Miller might have done something that should not have been done according to the NIH. Although, both grants are available to Dr. Miller there are specific guidelines and regulations that one needs to obey pertaining to funds and grants. This behavior was not appropriate as there are two different types of studies that are being conducted. 

There are several risks with this behavior by Dr. Miller. Attached you will find a youtube video of a case in Detroit in which a non-profit organization misused its funds and resulted in a legal lawsuit. Ferguson pled guilty and went to prison for eight years. 

Ferguson Case


https://www.youtube.com/watch?v=0P76pOoPSjo (Links to an external site.)

Dr. Miller behavior although did not have the intentions as Ferguson did not obey the regulations of NIH which can result in consequences. 

According to the NIH article, individuals who take the funds are to follow guidelines, the provide their own investigation to make sure that these guidelines and protocols are being followed. According to the article “The Division of Grants Compliance and Oversight (DGCO) is the focal point to advance external compliance with policy and legislative mandates and enhance compliance oversight by recipient institutions. The DGCO also ensures and evaluates the efficient and effective management of extramural resources”. It is extremely important to understand the rules and regulations of grant fundings, but most importantly following them as agreed. 

References: 

Charbonneau, D. H., & McGlone, J. (2013). Faculty experiences with the National Institutes of Health (NIH) public access policy, compliance issues, and copyright practices. Journal of the Medical Library Association101(1), 21–25. https://doi-org.proxy-library.ashford.edu/10.3163/1536-5050.101.1.004

United States Department of Health and Human Services. (2017). Grants compliance and

oversight.Retrieved from 

https://grants.nih.gov/policy/compliance.htm

 (Links to an external site.)



 (Links to an external site.)

 (Links to an external site.)

 

Pasachoff, E. (2020). Federal Grant Rules and Realities in the Intergovernmental Administrative State: Compliance, Performance, and Politics. Yale Journal on Regulation37(2), 573–649. https://doi-org.proxy-library.ashford.edu/http://yalejreg.com/

Audrey’s Post:

Grants and compliance

     When an organization applies for and is awarded a grant there are guidelines they have to follow with the grant and grant money per the NIH grant policy statement. The type of grant that Dr. Miller was awarded was a research grant specifically research on hypertension. Research grants are awarded for that specific area of study and the money from the grant is only for that area of study and in this case the grant money awarded to Dr. Miller was for hypertension (Burrow-Sanchez, 2016). In the case described for this week’s discussion where Dr. Miller spent the grant money on a sleep study it was not appropriate for Dr. Miller to use the grant money for sleep study special equipment when the grant money was originally awarded for hypertension research.

     According to my source, the potential risks for a manager or agency/organization when they are not complying with a grant is the grant can be terminated, in the future smaller grants will be awarded to organizations if they receive grant funding, and the organization will have to repay all of the money that was spent (Giese, 2021). Also, there could be fines and more penalties, the reputation of the organization or person could be damaged, there could be a suspension, as well as a corrective action plan, and the organization could be put on a special status for oversight and reviews (Giese, 2021).

     While Dr. Miller may have had good intentions with the money, now their organization as well as themselves could be facing all of the consequences previously mentioned. This is why it is important to have someone who is an internal control to make sure the grant money is going towards what it is for to avoid non-compliance issues such as the case with Dr. Miller (Giese, 2021).

References

Burrow-Sanchez, J.J., Martin, J.L., & Imel, Z.E. (2016). Applying for grant funding as a counseling

     psychologist: From thought to action. Counseling Psychologist, 44(4), 479-524.


     https://doi.org/10.1177/0011000015626272 (Links to an external site.)

Giese, J. (2021). Common Grant Noncompliance.


     https://www.wegnercpas.com/common-grant-noncompliance

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