Question: How come this question does not have an answer? Finance has asked for a preliminary report on how capital will be needed to purchase the
How come this question does not have an answer? Finance has asked for a preliminary report on how capital will be needed to purchase the units needed to complete these orders. Using the MRP matrices and the notes provided...
Given the following bill of materials, master production schedule, and inventory master file, generate MRP matrices for each item and identify orders that are past due. If any orders are past due give a recommendation on what course of action to take. If past due, Jody can subcontract the samplers themselves but it costs 4 times the unit cost of each sampler (e.g., subcontract 1 unit NW Grunge = 4*$6). Lower level items can be expedited if need be but the cost is twice as much as the unit cost of the item (e.g., expedite 1 unit Walla Walla Mud = 2*$1). Item Master File Item On Hand Lead Time Lot Size Unit Manufacturing /Purchasing Cost Scheduled Receipts Northwest Grunge Sampler 9 2 1 $6.00 0 Deep South Hooch Sampler 15 1 1 $6.00 0 Walla Walla Mud 250 1 10 $1.00 0 Mt. Hood Dredge 301 2 75 $1.00 0 Tacoma Terror 350 1 40 $0.50 0 Tuscaloosa Tornado 15 1 1 $0.50 0 Meridian Mothball 250 2 20 $0.50 0 Augusta Augsbarge 5 1 40 $0.50 0 Labels 257 2 100 $0.01 0 Boxes 611 2 91 $0.10 0 Finance has asked for a preliminary report on how much capital will be needed to purchase the units needed to complete these orders. Using the MRP matrices and the notes provided, calculate the capital costs per period and total for the quarter associated with the schedule you have constructed. There are no capital costs for finished samplers. Inventory holding costs are approximately the same for each lower level item and run about $0.50 per unit per period. There are no inventory costs for the final samplers themselves. Jody also needs to estimate the costs incurred from holding inventory over the quarter.
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