One unit of A is made of three units of B, one unit of C, and two units of D. B
ID: 457748 • Letter: O
Question
One unit of A is made of three units of B, one unit of C, and two units of D. B is composed of two units of E and one unit of D. C is made of one unit of B and two units of E. E is made of one unit of F.
Items B, C, E, and F have one-week lead times; A and D have lead times of two weeks.
Assume that lot-for-lot (L4L) lot sizing is used for Items A, B, and F; lots of size 45, 45, and 175 are used for Items C, D, and E, respectively. Items C, E, and F have on-hand (beginning) inventories of 10, 50, and 140, respectively; all other items have zero beginning inventory. We are scheduled to receive 12 units of A in Week 2, 40 units of E in Week 1, and also 50 units of F in Week 1. There are no other scheduled receipts. If 30 units of A are required in Week 8, use the low-level-coded bill of materials to find the necessary planned order releases for all components.
Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates. (Leave no cells blank - be certain to enter "0" wherever required.)
Period Gro 4 ss requirements Item A Scheduled receipts OH 0 Projected available balance LT=2 SS-0 Net requirements Q-L4L Planned order receipts Planned order releases Gross requirements Item C Scheduled receipts OH = 10 Projected available balance LT=1 SS 0 Net requirements Q = 45 Planned order receipts Planned order releases Gro ss requirements Item B Scheduled receipts OH 0 Projected available balance SS 0 Net requirements Q=L4L Planned order receipts Planned order releases Gross requirements Item D Scheduled receipts OH=0 LT=2 SS-0 Net requirements Q 45 Planned order receipts Projected available balance Planned order releases Gro ss requirements Item E Scheduled receipts OH = 50 Projected available balance LT=1 SS- 0 Net requirements Q 175 Planned order receipts Planned order releases Gross requirements Item F Scheduled receipts OH = 140Projected available balance LT=1 SS 0 Net requirements Q=L4L Planned order receipts Planned order releasesExplanation / Answer
Material Requirements Planning (MRP) Material Requirements Planning (MRP) is a computer-based production planning and inventory control system. MRP is concerned with both production scheduling and inventory control. It is a material control system that attempts to keep adequate inventory levels to assure that required materials are available when needed. MRP is applicable in situations of multiple items with complex bills of materials. MRP is not useful for job shops or for continuous processes that are tightly linked. The major objectives of an MRP system are to simultaneously: 1. Ensure the availability of materials, components, and products for planned production and for customer delivery, 2. Maintain the lowest possible level of inventory, 3. Plan manufacturing activities, delivery schedules, and purchasing activities. MRP is especially suited to manufacturing settings where the demand of many of the components and subassemblies depend on the demands of items that face external demands. Demand for end items are independent. In contrast, demand for components used to manufacture end items depend on the demands for the end items. The distinctions between independent and dependent demands are important in classifying inventory items and in developing systems to manage items within each demand classification. MRP systems were developed to cope better with dependent demand items. The three major inputs of an MRP system are the master production schedule, the product structure records, and the inventory status records. Without these basic inputs the MRP system cannot function. The demand for end items is scheduled over a number of time periods and recorded on a master production schedule (MPS). The master production schedule expresses how much of each item is wanted and when it is wanted. The MPS is developed from forecasts and firm customer orders for end items, safety stock requirements, and internal orders. MRP takes the master schedule for end items and translates it into individual time-phased component requirements. The product structure records, also known as bill of material records (BOM), contain information on every item or assembly required to produce end items. Information on each item, such as part number, description, quantity per assembly, next higher assembly, lead times, and quantity per end item, must be available. The inventory status records contain the status of all items in inventory, including on hand inventory and scheduled receipts. These records must be kept up to date, with each receipt, disbursement, or withdrawal documented to maintain record integrity. MRP will determine from the master production schedule and the product structure records the gross component requirements; the gross component requirements will be reduced by the available inventory as indicated in the inventory status records. 1.1 MRP Computations We will illustrate MRP computations through examples. Example 1 Suppose you need to produce 100 units of product A eight week from now, where product A requires one unit of product B and two units of product C, while product C requires one unit of product D and two units of product E. How many units of each type do you need? In this example it is easy to compute the requirements of each item to produce 100 units of product A: Req(B) = 100, Req(C) = 200, Req(D) = 200, Req(E) = 400. Suppose further that the lead-times for the products are as follows: Product A, four weeks, product B three weeks, product C two weeks, products D and E one week each. Since the production lead-time for product A is four weeks, we must have products B and C available at the end of week four. Since product B has a lead time of three weeks, we need to release the production of product B by the end of the first week. Similarly, product C need to be released for production at the end of week two, while products D and E must be released for production at the end of week one.
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