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Material Requirements Planning at A-Cat Corp.
This case analyzes how Sunita Menon’s adoption of an MRP system at A-CAT Corp. (A-CAT) has improved the production-planning process. The case examines the intricacies of procurement, warehousing and processing costs of various material components by critically evaluating different techniques in practice. Using situational scenarios, the case presents lot-sizing techniques — including lot for lot, economic order quantity, least total cost and least unit cost — for balancing costs such as set-up costs, ordering costs and inventory-holding costs. This case can be used in a core course on production and operations management under subtopics such as material requirements planning or inventory management. It can also be effectively utilized in elective courses on inventory management, materials management or similar topics. The case is intended to help students learn the basics of
MRP systems and use lot-sizing techniques in assessing the scope for cost reduction. It provides a good illustration of a small industry in an undeveloped region that has proactively undertaken several innovative steps to improve its competitiveness. In this way, the case demonstrates how a small/medium-sized organization, even with resource constraints, can achieve cost reduction by way of inventory management. The case also asks readers to take a holistic view of products and their sub-assemblies, and to identify the opportunities for cost reduction in this industry. Techniques and concepts that can be used to address the issues in this case include MRP systems and lot-sizing techniques (lot for lot, economic order quantity, least unit cost and least total cost).
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