Obtain the planned order release schedule for the Bell Assembly using a lot-for-lot production rule

Now, consider the MRP calculations for the Valves (see Figure 5):

Let us assume that the company expects an on-hand inventory of 186 valves at the end of week 3 and a receipt from an outside supplier of 96 valves at the start of week 5. Since three valves are required for each trumpet, one obtains gross requirements for the valves by multiplying the production schedule for the valve casing assembly (Table 4) by 3. Net requirements are obtained by substracting on-hand inventory and scheduled receipts. Table 5 shows these calculations:

Net requirements are obtained by substracting on-hand inventory and scheduled receipts from gross requirements. Because the on-hand inventory of 186 in period 3 exceeds the gross requirement in period 4, the net requirements for period 4 are 0. The remaining 60 units (186 126) are carried into period 5. In period 5, the scheduled receipt of 96 is added to the starting inventory of 60 to give 156 units. The gross requirements for period 5 are 126, so the net requirements for period 5 are 0, and the additional 30 units are carried over to period 6. Hence, the resulting net requirements for period 6 are 96-30=66. The net requirements are phased back three periods (because of the leadtime) to obtain the time-phased net requirements and the production schedule (because these valves are produced internally). Note that the 96 scheduled receipts correspond to the defective parts that were returned to the company and reworked.

rigure 5. Production Schedule tor the Valves Table 5. MRP Calculations for the Valves rigure 5. Production Schedule tor the Valves Table 5. MRP Calculations for the Valves