A n a l y t i c s E x e r c i s e : A n M R P E x p l o s i o n — B r u n s w i
ID: 428369 • Letter: A
Question
A n a l y t i c s E x e r c i s e : A n M R P E x p l o s i o n —
B r u n s w i c k M o t o r s
Recently, Phil Harris, the production control manager at
Brunswick, read an article on time-phased requirements
planning. He was curious about how this technique might
work in scheduling Brunswick’s engine assembly operations
and decided to prepare an example to illustrate the
use of time-phased requirements planning.
Phil’s fi rst step was to prepare a master schedule for one
of the engine types produced by Brunswick: the Model
1000 engine. This schedule indicates the number of units of
the Model 1000 engine to be assembled each week during
the last 12 weeks and is shown below. Next, Phil decided to
simplify his requirements planning example by considering
only two of the many components that are needed to complete
the assembly of the Model 1000 engine. These two
components, the gear box and the input shaft, are shown
in the product structure diagram below. Phil noted that the
gear box is assembled by the Subassembly Department and
subsequently is sent to the main engine assembly line. The
input shaft is one of several component parts manufactured
by Brunswick that are needed to produce a gear box subassembly.
Thus, levels 0, 1, and 2 are included in the product
structure diagram to indicate the three manufacturing
stages that are involved in producing an engine: the Engine
Assembly Department, the Subassembly Department, and
the Machine Shop.
The manufacturing lead times required to produce the gear
box and input shaft components are also indicated in the product
structure diagram. Note that two weeks are required to produce
a batch of gear boxes and that all the gear boxes must be
delivered to the assembly line parts stockroom before Monday
morning of the week in which they are to be used. Likewise,
it takes three weeks to produce a lot of input shafts, and all the
shafts that are needed for the production of gear boxes in a
given week must be delivered to the Sub assembly Department
stockroom before Monday morning of that week.
In preparing the MRP example Phil planned to use the
worksheets shown on the next page and to make the following
assumptions:
1. Seventeen gear boxes are on hand at the beginning of
Week 1, and fi ve gear boxes are currently on order to
be delivered at the start of Week 2.
2. Forty input shafts are on hand at the start of Week 1,
and 22 are scheduled for delivery at the beginning of
Week 2.
Q u e s t i o n s
1 Initially, assume that Phil wants to minimize his inventory
requirements. Assume that each order will be
only for what is required for a single period. Using the
following forms, calculate the net requirements and
planned order releases for the gear boxes and input
shafts. Assume that lot sizing is done using lot-for-lot
(L4L).
2 Phil would like to consider the costs that his accountants
are currently using for inventory carrying and
setup for the gear boxes and input shafts. These costs
are as follows:
Part Cost
Gear Box Setup 5 $90/order
Inventory carrying cost 5 $2/unit/week
Input Shaft Setup 5 $45/order
Inventory carrying cost 5 $1/unit/week
MATERIAL REQUIREMENTS PLANNING chapter 21 585
Given the cost structure, evaluate the cost of the
schedule from question 1. Assume inventory is valued
at the end of each week.
3 Find a better schedule by reducing the number of
orders and carrying some inventory. What are the
savings with this new schedule?
Week
Quantity
1 2 3 4 5
Engine assembly master schedule
6 7 8 9 10 11 12
Week
Gross requirements
Scheduled receipts
Projected available balance
Net requirements
Planned order release
1 2 3 4 5
Gear box requirements
6 7 8 9 10 11 12
Week
Gross requirements
Scheduled receipts
Projected available balance
Net requirements
Planned order release
1 2 3 4 5 6 7 8 9 1 01 1 2
Input shaft requirements
P r
here is the book link i have with chegg
https://www.chegg.com/homework-help/operations-and-supply-chain-management-14th-edition-solutions-9780078024023
Refer to the Excel speadsheet, "Inventory Management," to complete the "Analytics Exercise: An MRP Explosion - Brunswick Motors," at the end of Chapter 21 in the textbook. Answer Questions 1-3.
Question 1 - completed
Question 2 - completed
Question 3 - incomplete
vw Mastor Schodula 2 Weck 15 15 Gear box r 7 Week 8 Gross Requirements 9 Scheduled Recelpts L5 16Since Gear box 1X Engine Assembly, use Master Engine Assembly oty Firom Problem OCell B10, Beg Balance of 17- Gross Requirement of15 Cell C10 Carryover 16Not Raq-Grass Re-Projocted Avallahla Ralance fram prior wook Prolected Avalable Balance 12 planned Drder Race 13 Planned Order Release 15 From E12 for 2 Weeks Lead Time 15 15 Input shaft r 19 Week 20 Gross Requirements 1 Scheduled Receipts 10 12 Input Shaft Is 2 X Gear Box, then each week Is 2 X Row 13 Availablo Balance Cell 822, Bog Balance af 40- Gross requirament of 10 Wrek 5 and heyond Dsince no scheduled recoipts ??? Net ReqsGross Req Projected Available Balance from prior week 23 NatH 24 Planned Order Recei 25 Planned Order Release 25 as roww above Planned Crder Receipt from 3 weeks in future From F24 for 3 Weeks Lead TimeExplanation / Answer
1. Initially, assume that Phil wants to minimize his inventory requirements. Assume that each order will be only for what is required for a single period.
Engine Assembly Master Schedule
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Quantity
15
5
7
10
15
20
10
8
2
16
Gear Box Requirements
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Gross Requirements
15
5
7
10
15
20
10
8
2
16
On Hand
2
2
Scheduled Receipts
5
Net Requirements
5
10
15
20
10
8
2
16
Planned Order Release
5
10
15
20
10
8
2
16
Input Shaft Requirements
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Gross Requirements
10
20
30
40
20
16
4
32
On Hand
30
32
32
2
Scheduled Receipts
22
Net Requirements
38
20
16
4
32
Planned Order Release
38
20
16
4
32
2. Phil would like to consider the costs that his accountants are currently using for inventory carrying and setup for the gearbox and input shafts. These costs are as follows:
Part
Cost
Gear Box
Setup = $90/order
Inventory carrying cost = $2/unit/week
Input Shaft
Setup = $45/order
Inventory carrying cost = $1/unit/week
Given the cost structure, evaluate the cost of the schedule from (1). Assume inventory is valued at the end of each week.
Gear Box
Setup Cost = 8 x 90 = $720
Inventory = 4 x 2 = $8
Total = $728
Input Shaft
Setup Cost = 5 x 45 = $225
Inventory = 96 x 1 = $96
Total = $321
Total Cost = $1,049
3. Calculate a schedule using least-total-cost lot sizing. What are the savings with this new schedule?
Engine Assembly Master Schedule
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Quantity
15
5
7
10
15
20
10
8
2
16
Gear Box Requirements
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Gross Requirements
15
5
7
10
15
20
10
8
2
16
On Hand
2
2
10
30
10
18
16
Scheduled Receipts
5
26
Net Requirements
5
10
45
20
10
8
2
16
Planned Order Release
15
10
45
15
26
2
Input Shaft Requirements
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Gross Requirements
30
90
52
On Hand
10
32
32
Scheduled Receipts
22
Net Requirements
58
52
Planned Order Release
58
52
Gear Box
Setup Cost = 3 x 90 = $270
Inventory = 88 x 2 = $176
Total = $446
Input Shaft
Setup Cost = 2 x 45 = $90
Inventory = 74 x 1 = $74
Total = $164
Total Cost = $610
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Quantity
15
5
7
10
15
20
10
8
2
16
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