Figure illustrates the BOM for product A. The MPS start row in the master production schedule for product A calls for 50 units in week 2.65 units in weeks 5, and 80 units in week 8. Item C is produced to make A and to meet the forecasted demand for replacement parts. Past replacement part demand has been 20 units per week (add 20 units to C’s gross requirements). The lead times for items F and C are 1 week, and for the other items the lead time is 2 weeks. No safety stock is required for items B, C, D, E, L and F. The L4L lot-sizing rule is used for items B and F; the POQ lot-sizing rule (P = 3) is used for C. Item F has an FOQ of 600 units, and D has an FOQ of 250 units. On-hand inventories are 50 units of B, 50 units of C, 120 units of D, 70 units of IL and 250 units of E item B has a scheduled receipt of 50 units in week2.

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