1 Consider the advantages and disadvantages of ERP Do you

1 - Consider the advantages and disadvantages of ERP . Do you think that installing an ERP system would be worth it, even at a cost of, say $100 million (for a fairly large firm)?

2 - What functions of a firm affect an MRP system? How?

Solution

Advantages of ERP system

1) An ERP system gives visibility to all the processes and department in the organisation.

2) With an ERP system there is proper work flow for each process which makes the transaction smooth and quicker.

3) There is one single reporting system which covers all the transactions of the company which helps is getting data easily and analyse the data

4) The same ERP system can be used across all the functions and department, this helps in saving cost and time on multiple software

5) There are various modules available in the ERP like Human resource management, Finance/Accounts, Marketing/Sales, Project Management etc.

6) ERP system makes it easier to track orders, inventory, revenue, sales tracking.

7) It is easy to integrate other systems to the ERP system through an Application Programming Interface

Disadvantages of ERP

1) The cost of buying ERP software,planning, testing, implementation of the software is too high.

2) The cost benefits of ERP system cannot be realized immediately and the benefit is difficult to measure.

3) The implementation and integration of the ERP system is very much time consuming

4) The migration of the system might be little difficult

5) There is a need for involvement of all the people for successful implementation of ERP

I think installing an ERP system would for a cost of $ 100 million would not be worth

2) MRP system refers to Material Requirement Planning system. This system helps in automation of manufacturing process. The system handles the requirement of materials, ordering of raw material, billing of the material, maintenance of inventory and purchase costs. Each of these items deals with management, opeartions, financing and scheduling. The management is impacted by the MRP since it provides plan to execute the production. The master production is impacted by providing a schedule of what and when is to be made.In similar way operations are impacted in the organisation. Finance is impacted by way of ordering of the quantity of raw material and providing list of components which is required for production. In short it handles all the process from start to end of manufacturing the product.