A Working MRP System Allows a Firm to React to Even

question 121

Essay

A working MRP system allows a firm to react to even minor changes in production requirements. Discuss both the advantage and disadvantage of having such ability.

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Definitions:

Comparative Advantage

The ability of an individual, company, or nation to produce a good or service at a lower opportunity cost than its competitors.

High-Opportunity Cost

Refers to the high value or benefit that is foregone from not choosing the next best alternative with available resources.

Low-Opportunity Cost

Describes a situation where choosing one option over another entails a minimal sacrifice of alternative opportunities or benefits.

International Trade

The trading of products, services, and financial assets between different countries or territories.