A390 Operations Management all 2017 2. [Lot Sizing in Material Requirement Syste
ID: 365861 • Letter: A
Question
A390 Operations Management all 2017 2. [Lot Sizing in Material Requirement System (MRP) a job as a production planner at Honda Automotive Assembly Plant in Lincoln, Alabama. His first task on the job training is to review the master production plan shown below: (Initial in Lead time 1 week, Holding cost $1 per unit per week.) Part: Period Gross requirements 100170 200 150 0 1200 Develop an ordering plan and costs for this plant using the following techniques. a) Develop the lot-for-lot MRP table and cakculate the total relevant costs. Part Lot-for-Lot Lot Siz Gross requirements Scheduled receipts Projected available (Be Period 150 Net requirements Planned orderreceipts Planned order releases Lead time 1 wk Lot size Holding Cost Ordering Cost Total Cost = b) Develop the Economic Order Quantity (EOQ) lot sizing technique. (Assume EOQ 200) Period Part: EOQ Lot Siz 100 170 200 150 0 1200 Scheduled receipts Projected availa ble (Beg.) On hand (End of period) Net requirements Planned order receipts lanned order releases Lead time 1wk Lot size- Ordering Cost Total Cost Holding Cost Develop the Periodic Order Quantity (POQ) lot sizing technique. (Assume POQ Interval 2 weeks) Perioc Part POQ Lot Siz Gross requirements Scheduled receipts Projected available (Beg) 150 1001170|200 | 150 0 120 1 0 On hand (End of period) Net requirements Planned order receipts Planned order releases 1 wk Lot sizes Lead time Total Cost = Holding Cost = Ordering Cost = (d) Among the three lot sizing techniques above, which has the lowest cost?Explanation / Answer
Part a
Item:
OH = 150
LT = 1
SS = 0
Q = L4L
1
2
3
4
5
6
7
Gross Req.
100
170
200
150
0
120
0
Scheduled receipts
Projected-on-hand
150
50
0
0
0
0
0
Inv. On hand (ending inv)
50
0
0
0
0
0
0
Net Requirement
0
120
200
150
0
120
0
Planned order Receipts
120
Planned order releases
120
200
150
120
Total Inventory carried
50
Holding cost
50*1 = 50
Number of Orders
4
Ordering Cost
4*200 = 800
Total Cost
50 + 800 = 850
Part b
Item:
OH = 150
LT = 1
SS = 0
Q = EOQ = 200
1
2
3
4
5
6
7
Gross Req.
100
170
200
150
0
120
0
Scheduled receipts
Projected-on-hand
150
50
80
80
130
130
0
Inv. On hand (ending inv)
50
80
80
130
130
10
10
Net Requirement
0
120
120
70
0
0
0
Planned order Receipts
200
200
200
0
0
0
Planned order releases
200
200
200
Total Inventory carried
50+8+80+130+ 130 + 10 +10
= 490
Holding cost
490*1 = 490
Number of Orders
3
Ordering Cost
3*200 = 600
Total Cost
490 + 600 = 1090
Part C
Item:
OH = 150
LT = 1
SS = 0
Q = POQ = 2 weeks
1
2
3
4
5
6
7
Gross Req.
100
170
200
150
0
120
0
Scheduled receipts
Projected-on-hand
150
50
200
0
0
0
0
Inv. On hand (ending inv)
50
200
0
0
0
0
0
Net Requirement
0
120
0
150
0
120
0
Planned order Receipts
320
0
150
0
120
0
Planned order releases
320
150
120
Total Inventory carried
50+200 = 250
Holding cost
250*1 = 250
Number of Orders
3
Ordering Cost
3*200 = 600
Total Cost
250+600 = 850
Part a
Item:
OH = 150
LT = 1
SS = 0
Q = L4L
1
2
3
4
5
6
7
Gross Req.
100
170
200
150
0
120
0
Scheduled receipts
Projected-on-hand
150
50
0
0
0
0
0
Inv. On hand (ending inv)
50
0
0
0
0
0
0
Net Requirement
0
120
200
150
0
120
0
Planned order Receipts
120
Planned order releases
120
200
150
120
Total Inventory carried
50
Holding cost
50*1 = 50
Number of Orders
4
Ordering Cost
4*200 = 800
Total Cost
50 + 800 = 850
Part b
Item:
OH = 150
LT = 1
SS = 0
Q = EOQ = 200
1
2
3
4
5
6
7
Gross Req.
100
170
200
150
0
120
0
Scheduled receipts
Projected-on-hand
150
50
80
80
130
130
0
Inv. On hand (ending inv)
50
80
80
130
130
10
10
Net Requirement
0
120
120
70
0
0
0
Planned order Receipts
200
200
200
0
0
0
Planned order releases
200
200
200
Total Inventory carried
50+8+80+130+ 130 + 10 +10
= 490
Holding cost
490*1 = 490
Number of Orders
3
Ordering Cost
3*200 = 600
Total Cost
490 + 600 = 1090
Part C
Item:
OH = 150
LT = 1
SS = 0
Q = POQ = 2 weeks
1
2
3
4
5
6
7
Gross Req.
100
170
200
150
0
120
0
Scheduled receipts
Projected-on-hand
150
50
200
0
0
0
0
Inv. On hand (ending inv)
50
200
0
0
0
0
0
Net Requirement
0
120
0
150
0
120
0
Planned order Receipts
320
0
150
0
120
0
Planned order releases
320
150
120
Total Inventory carried
50+200 = 250
Holding cost
250*1 = 250
Number of Orders
3
Ordering Cost
3*200 = 600
Total Cost
250+600 = 850
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