Production Planning And Control : Hugo Costa Campbel Student Number

1495 Words Aug 24th, 2014 6 Pages
MANF 4615
PRODUCTION PLANNING & CONTROL

Student: Hugo Costa Campbel Student number: z5007692 Due date: 25/08/2014

Assignment 1

Question 1: The customer order decoupling point is described as the point at which demand changes from independent to dependant. What does this mean and why is this important to managers?

The demand can be divided in two different types:
- The independent demand depends on the market conditions and it is difficult to control and must be forecast. Even though the company can interfere or stimulate this demand through some events such as promotions or price reductions, the final amount will depend on the item demanded in the market. Thus, companies will have to supply the demand without having any advance concrete visibility of consumer requests. In most cases, customer demands are independent demands;
- The dependent demand is relatively predictable because it depends on a few factors to happen. Demand of components in the assembly of a product is often dependent demand and can be calculated although the plans may need to change.
The customer order decoupling point (CODP) is the point at which demands change from independent to dependent. In other words, it is defined as the point in the value chain for a product, where the product is linked to a specific customer order. The CODP is also the last point at which inventory is held. Thus, the inventory at the CODP is a strategic stock-point.
Different manufacturing situations such as…

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