Product X is made of two units of Y and three of Z. Y is made of one unit of A a

Question

Product X is made of two units of Y and three of Z. Y is made of one unit of A and two units of B. Z is made of two units of A and four units of C. Lead time for X is one week; Y, two weeks; Z, three weeks; A, two weeks; B, one week; and C, three weeks. Current on-hand inventories of 25 X, 40 Y, 35 Z, 50 A, 100 B, and 650 C. If 85 units of X are needed in week 10, develop a planning schedule showing when each item should be ordered and in what quantity, i.e the Planned Order Release.

Explanation / Answer

Product X - 2Y + 3Z Product Y - A + 2B Product Z - 2A + 4C Projected On Hand Calculation = Last Period Closing + Scheduled Receipt + Planned Receipt - Gross Requirement Net Requirement = Last Period Closing + Scheduled Receipt - Gross Requirement (If the above calculation results in negative amount, then such amount is taken as Net Requirement, else 0) Planned Receipt = If Net Requirement > 0, Planned Receipt as per Lot Size Planned Order Release = If Planned Receipt >0, Order as per Lead Time to be placed Item = X Q = L4L SS = 0 LT : 1 week Period 0 1 2 3 4 5 6 7 8 9 10 Gross Requirement 0 0 0 0 0 0 0 0 0 85 Scheduled Receipts 0 0 0 0 0 0 0 0 0 0 Projected On Hand 25 25 25 25 25 25 25 25 25 25 0 Net Requirements 0 0 0 0 0 0 0 0 0 60 Planned Receipts 0 0 0 0 0 0 0 0 0 60 Planned Order Release 0 0 0 0 0 0 0 0 60 0 2 Units of Y are required for each unit of X when order for X is released Item = Y Q = L4L SS = 0 LT : 2 weeks Period 0 1 2 3 4 5 6 7 8 9 10 Gross Requirement 0 0 0 0 0 0 0 0 120 0 Scheduled Receipts 0 0 0 0 0 0 0 0 0 0 Projected On Hand 40 40 40 40 40 40 40 40 40 0 0 Net Requirements 0 0 0 0 0 0 0 0 80 0 Planned Receipts 0 0 0 0 0 0 0 0 80 0 Planned Order Release 0 0 0 0 0 0 80 0 0 0 3 Units of Z are required for each unit of X when order for X is released Item = Z Q = L4L SS = 0 LT : 3 weeks Period 0 1 2 3 4 5 6 7 8 9 10 Gross Requirement 0 0 0 0 0 0 0 0 180 0 Scheduled Receipts 0 0 0 0 0 0 0 0 0 0 Projected On Hand 35 35 35 35 35 35 35 35 35 0 0 Net Requirements 0 0 0 0 0 0 0 0 145 0 Planned Receipts 0 0 0 0 0 0 0 0 145 0 Planned Order Release 0 0 0 0 0 145 0 0 0 0 2 Units of B are required for each unit of Y when order for Y is released Item = B Q = L4L SS = 0 LT : 1 week Period 0 1 2 3 4 5 6 7 8 9 10 Gross Requirement 0 0 0 0 0 0 160 0 0 0 Scheduled Receipts 0 0 0 0 0 0 0 0 0 0 Projected On Hand 100 100 100 100 100 100 100 0 0 0 0 Net Requirements 0 0 0 0 0 0 60 0 0 0 Planned Receipts 0 0 0 0 0 0 60 0 0 0 Planned Order Release 0 0 0 0 0 60 0 0 0 0 4 Units of C are required for each unit of Z when order for Z is released Item = C Q = L4L SS = 0 LT : 3 weeks Period 0 1 2 3 4 5 6 7 8 9 10 Gross Requirement 0 0 0 0 0 435 0 0 0 0 Scheduled Receipts 0 0 0 0 0 0 0 0 0 0 Projected On Hand 650 650 650 650 650 650 215 215 215 215 215 Net Requirements 0 0 0 0 0 0 0 0 0 0 Planned Receipts 0 0 0 0 0 0 0 0 0 0 Planned Order Release 0 0 0 0 0 0 0 0 0 0 1 Unit of A is required for each unit of Y when order for Y is released 2 Units of A are required for each unit of Z when order for Z is released Item = A Q = L4L SS = 0 LT : 2 weeks Period 0 1 2 3 4 5 6 7 8 9 10 Gross Requirement 0 0 0 0 0 290 80 0 0 0 Scheduled Receipts 0 0 0 0 0 0 0 0 0 0 Projected On Hand 50 50 50 50 50 50 0 0 0 0 0 Net Requirements 0 0 0 0 0 240 80 0 0 0 Planned Receipts 0 0 0 0 0 240 80 0 0 0 Planned Order Release 0 0 0 240 80 0 0 0 0 0

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