2)The MRP process, or materials requirement planning, is the logic for determining the number of dependent inventories to produce the product based on demand (Jacobs & Chase, 2021). The master production schedule (MPS) is an input for the MRP process. The MPS will include critical components such as demands from sales, warehouse replenishment, spares, and other product production requirements.The MRP will also contain the bill-of-materials, which lists the quantities and sequence of the materials, parts, and components to create a product (Jacobs & Chase, 2021). For example, to produce a finished product like a cell phone, Apple needs first to identify all the phone components. Then managers will identify the quantities of the parts and then the sequence in which phones are constructed. Starting with the MPS, managers will then plan the production cycle using the MRP and bill-of-materials to meet the demand.
3)Renting is nothing other than renting an item for a specific length of time for an alliance agreement of price with an agreement, whereas purchasing gives you complete rights to the asset and makes you the ownership of the asset. There are a variety of benefits that leasing brings, rather than purchasing an asset. To beginning, it eliminates the need to put more money down up front (Brigham & Ehrhardt, 2020).
The following are the benefits of leasing over purchasing an asset- it conserves capital, tax advantages, easy to care for, the owner can cover the expense of an asset’s damage or repair, the assets can be changed in accordance with technological advancements at no additional expense, there is no asset risk, it is a simple source of funding, with a consistent cash flow, the owner will be charged a predetermined price, it has the option to terminate.
Here are several examples:
Leasing company-required equipment such as computers, buildings, and so on to prevent capital outlay and computer replacement after a set period. A middle-class employee works in a firm, but his residence is 10 kilometers distant, causing him problems. He wants to live near the firm, but his wealth is insufficient to purchase an apartment. However, leasing an apartment with an agreed ratio is conceivable, and after a few days, he will have the opportunity to purchase a residence as well.
4)In the company, leasing items over buying them outright is better than buying them outright. The company leases all the office buildings and residential properties it needs for its operations. As a result of leasing our building, our company can raise capital for improvements and maintain our building. As a result, we are unable to purchase the property. The company started at a lower cost since it did not have to make a down payment because it leased the properties rather than buying them. In addition to this, it also makes it possible for the company to move locations as it grows and expands into a large company. However, the initial cost of purchasing is usually higher. It may be necessary to take out a loan in order to finance. Depending on your situation, this may not be a viable option if you do not have a large cash reserve.” (Newman, 2006).
Additionally, leasing allows the company to deduct the entire lease payment. After putting too many miles on them, the company decided they could not lease the vehicles. Leasing has many advantages. A lease allowed this organization to start with minimal start-up costs and a lower debt-to-income ratio.
