Space Age Furniture Company

Space Age Furniture Company

Introduction

Operations management refers to the processes management that produces or delivers products as well as services. Though all the organizations might not include any particular division of operations, yet every business involves some operational activities that must be handled with efficiency (Greasley, 2007). One of the major components associated with efficient operations management is the Material Requirement Planning (MRP), which was introduced by John Orlicky and George Plossl. The importance of this planning is to recognize the product that customer requires, i.e. it compares the needed quantity to the on hand inventory level and identifies the timing and quantity of the needed goods to be produced (Li, 2007). This report deals with MRP concept and its application in a business, where, a case study is provided to offer an in-depth analysis of efficient management of operations through MRP.

Discussion

Options Available to Carol for Addressing This Problem

The options available to Carol include the adoption of Material Requirement Planning (MRP), as it would help the company in comparing the needed quantity to the on hand inventory level and determining the time and quantity of the goods required to be produced. As the company has involved just a single worker, Ed Szewczak, the company should focus on another mode of operation that can facilitate the company in producing more in time. If the company would go for overtime, more inventory costs will be incurred which would reduce the profits of the business. Thus, the company must go for optimal material requirement planning while focusing on different mode of operations.

Benefits of Reducing the Minimum Quantity of Subassemblies

A sub assembly is a number of machined elements constituted of a single unit, which mostly forms one part of a larger and more complex assembly. This can involve any item within the abilities of company's manufacturing processes, and within an extensive range of materials. The reduction in minimum quantities of sub assemblies can help the company by addressing the consistent requirement of efficient manufacturing process. The most beneficial outcomes of reducing the minimum sub assemblies include: cost savings, increased material flow with reduced supervision, inflexibility meeting customer demand, improved quality, reduce fright charges, quality assurance, and some others (Galloway, 1993). Thus, these cumulative effects for any company can result in significant savings for company's operations management (MRP).

Assembled Items' Cost Savings

The reduction in minimum sub assemblies will decrease or eradicate company's component inventory, reduce labor cost, as well as overheads costs, while benefiting the easier replacement of parts if required. Furthermore, Space Age Furniture Company can also generate considerable savings by managing the purchase of components and efficient sub-assembly (Galloway, 1993).

Firstly, reducing the minimum sub assemblies will eliminate the costs of labor as well as overheads associated with the sourcing and purchasing of components, which are magnified by the figures of individual items assembled per product. Further, the eradication of materials and administrative time associated with research, processing purchase orders, negotiation, and inventory levels management converts to ...