Question 1 (Marks: 25)

Read the following case study based on Apple and answer the questions that follow. Not all the answers can be found in the case study, you may be required to conduct additional research.

Apples Aggregate Planning and MRP Apple considered as one of the most revolutionary companies known for bringing most innovative and radical products for its customers. As much as company has achieved success both in popularity and financially, apple employs very secretive production processes and very few senior managers are aware of the developments going on while product launch. Another major aspect of Apple is that they have very few products being produced on assembly lines in China. So, it is much easier to manage for managers to review and take decisions fast. It is this secretive process of design, production and launch which creates a big hype among all the apple fans, thus even encourages the company executives for keeping the process even more secretive. It is because of this there have been instances where some of the apple product designs get in the hand of journalists and gets leaked to public. So, in the wake of these events, the company has a very strict policy with regard to maintaining the secrecy of ongoing projects development to the extent that they can create physical barriers between teams so that there is no communication. Based on the ranking from Gartner, Apple is the top of supply chain excellence, followed by McDonalds and Amazon. At least 97% of Apples procurement expenditures for materials, manufacturing and assembly of products are finished worldwide in 2013. In 2012, Apple sold approximately 120 million iPhones, 60 million iPads, 35 million iPods and 15 million Macs. None of these iPhones were produced in the US, expect vital components, and nearly 85% were assembled in China. Why Apple obsessed to outsource its production line to other countries, especially in Asia? Steve Jobs once claimed that it was not because of the cheap labor in Asian countries, but those factories could produce much faster with quite a large scale and flexibility. One of Apples well - known suppliers is Foxconn, which is a Taiwan company. They can produce thousands of iPhones each day with relatively lower cost of labour.

Apple also found another supplier, Pegatron which is also a Taiwan company, to produce iPad and some versions of iPhone. Apple has already had so much outsourced suppliers.

Q.1.1 Employees at Apple want to know what a materials requirements planning (MRP) system is. In your own words, discuss the concept of MRP. Note: More marks will be awarded for the quality of your paraphrasing. (3)

Q.1.2 Analyse any four benefits of an MRP system in relation to Apple. Note: You are required to paraphrase your understanding of the benefits before you apply it to the context of Apple. (12)

Q.1.3 The just-in-time inventory system can provide various efficiencies for an organisation like Apple. Analyse this concept and argue how it could benefit Apple. Note: You are required to paraphrase your understanding of the benefits before you apply it to the context of Apple.