Planning and Individually Designed Business

Topics: Planning, Enterprise resource planning, Management Pages: 2 (691 words) Published: January 20, 2011
Q1: What are "make-to-order" (MTO) and "make-to-stock" (MTS)? Why did EA cakes want MTS over MTO? Do you agree with such a decision? Why or why not? Q2: What are aggregate: capacity planning (ACP), master product scheduling (MPS) and shop floor scheduling? Q3: How is the adoption of SAP viewed by (a) production staff, (b) IT staff and (c) the management? Q4: Can a standard software system like SAP give adequate computer support to an individually designed business management system? Take a stand, and give some rationale for your position. Make-to-order (MTO) is a business production strategy that typically allows consumers to purchase products that are customized to their specifications. MTO strategy only manufactures the end product once the customer places the order. This strategy creates additional wait time for the consumer to receive the product, but it allows for more flexible customization compared to purchasing from retailers' shelves. The final product is usually a combination of standard items and items custom-designed to meet the special needs of the customer. Make-to-stock (MTS) is a traditional production strategy used by businesses to match production with consumer demand forecasts. MTS method forecasts demand to determine how much stock should be produced. MTS relies heavily on the accuracy of demand forecasts; inaccurate forecasts will lead to losses. Customer orders are typically filled from existing stocks, and production orders are used to replenish those stocks. EA cakes want MTS over MTO because the market is more dynamic, and increase in competition from home (New Zealand) and abroad. Most customers wanted their product not next week, but right away. I agree with EA cakes’ decision of wanting to change from MTO to MTS because of the reasons above and also MTO increases market speed and allows expanding the market share by attracting and catching new customers. Aggregate capacity planning (ACP) is an attempt to balance capacity and demand...
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