Brite Lite Switches, Inc

Abstract

This case deals with production and inventory planning in a dependent-demand environment. Students must choose and evaluate a master production schedule in the course of determining the net requirements of components in a two-level end-product explosion. The case is intended to be taught with Note on Material-Requirements Planning (OM-0816) or similar expository reading about MRP. Excerpt UVA-OM-0815 Rev. Oct. 26, 2009 BRITE LITE SWITCHES, INC. Margret Nedelkoff, division manager for the Plastics Component division of Brite Lite Switches (BLS), was discussing with Flip Edison a proposal for a new system for planning and controlling production. Edison, the new manager of production planning, had drafted a memo (Exhibit 1) suggesting a move from the current inventory control process to a material requirement planning (MRP) system. While Nedelkoff was aware of other manufacturers' successes with MRP, she also was skeptical about the benefits Edison described in his memo, given that the division had instituted a new, equally promising inventory control system only two years earlier that had failed to live up to expectations. As Nedelkoff rose to end the meeting, she said: Flip, I appreciate what you are saying, but I'm just not sure that this is what we need. We have yet to see any significant return on our $ 200,000 investment in a new EOQ/reorder-point system two years ago. And on top of that, putting in a new system is really disruptive. The supervisors and employees on the shop floor have to learn a whole new way of doing things, and if it is anything like last time, I'll be getting a phone call every day for months from Jack Reynolds, VP of Marketing, telling me how many sales he has lost because we can't deliver what he needs. I know the current system isn't perfect, but I'm not sure that it can't be improved. I am going to have to think a lot about this before I commit the kind of resources and time you are talking about. Edison left the office determined to address Nedelkoff's concerns. He reasoned that perhaps he had moved too aggressively on the changes he recommended. If he could demonstrate the benefits on a few items of inventory, he was sure that she would see the logic of switching the entire planning and production process over to his proposed system. . . .