An electronics company that produces subassemblies for clients has

determined the following independent demand requirements for the next 8

weeks:

Independent Period

Demand 1 2 3 4 5 6 7 8

Assembly A 700 1300 700 1300

Assembly C 1250 1250 1250 1250 1250 1250 1250 1250

Assembly E 1150 1150 1150 1150 1150 1150 1150 1150

Page 2 of 5

Assemblies C and E are themselves components of assembly A. The bill of

materials for the subassemblies is:

A

B

(2)

C

(3)

D

(2)

C

(5)

D

(2)

G

I

(3)

E

(3)

F

(2)

H

(2)

J

(2)

C

(4)

D

(2)

E

(3)

F

(2)

E

(1)

F

(2)

These assemblies are building components for many finished electronics products,

and therefore the company tends to maintain large inventories of subassemblies

C and E.

The inventory management information for components B, C, D, and E is:

Item

Category B C D E F

Lot-sizing rule POQ FOQ FOQ FOQ FOQ

P=3 Q=15,000 Q=35,000 Q=7,500 Q=10,000

Lead Time (weeks) 2 1 1 1 1

Safety Stock 500 5,000 10,000 2,000 5,000

Scheduled Receipts 3,000 15,000 35,000 7,500 10,000

week 2 week 1 week 1 week 1 week 1

Beginning Inventory 750 6,750 12,350 6,125 15,000

Page 3 of 5

(a) Develop the production schedule for each component in assembly A.

Make sure the independent demand for C and E are also included in the

schedule.

(b) A breakdown at a competing company means that the company expects

that demand for item E will increase by 1,000 units/week starting in

week 6. What changes does the company have to implement to supply

this new level of demand?

(c) A new client has approached the company. This client wants 1,500 assembly

B every week (creating an independent demand for assembly B)

starting in week 3, but is flexible on that date. When is the earliest possible

date (week) that the contract could start (after or on week 3)? It is

now at the beginning of week 1.