3. Mastermind Sdn Bhd (MSB) is a manufacturer of computer software. After hearing a talk at a branch meeting on “Advanced Manufacturing Technology”, the Managing Director of MSB, Syed Rahim would like the management to consider in introducing the Material Requirements Planning (MRP), Just-In-Time (JIT), Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM) in MSB’s manufacturing operations. However, he is personally unclear of the concepts and remarks:

“I’m considering adopting the MRP, JIT, CAD and CAM systems in our manufacturing operations. But, I’m not so sure about several things regarding to the systems mentioned in the talk just now. First, as far as I understand, MRP is a push-based system, pushing work through the computer system. Once in place, MRP allows the Manufacturing Resource Planning II to be adopted, which enables the inventory control by matching the supply and demand. Thus, MRP serves as a planning and control system designed for organizations which engaged in mass production. However, I’m wondering on how MRP might improve our manufacturing operations. 

Second, talking about the JIT system… as we all knows that the main objective of the system is to buy or produce products or components only when they are required, so that they will not simply go into stock and effectively become buffer stock. Hence, are there any potential disadvantages of the requirement to carry no buffer stock under the JIT operation? And the third, I’m not so clear about the ways of organizing and managing information system activities in the context of the wider organization. In this context, I’m still in doubt of the benefits gained by our organizations from the implementations of CAD and CAM.”

Consequently, in clarifying those ambiguities raised by Syed Rahim, you as a Management Accountant are required to prepare a discussion paper for circulation to the directors and senior management, which responses to all questions regarding to the systems.

REQUIRED:

1. Describe FOUR (4) ways on how MRP might improve the manufacturing operations of MSB.
2. Discuss FOUR (4) potential disadvantages of the requirement to carry no buffer stock under the JIT system which will be adopted by MSB.
3. Explain FOUR (4) potential benefits of both CAD and CAM to MSB.