Question: Please could you explain the method in full sentences - thank you :) At the following company, the production planning system is run weekly to
Please could you explain the method in full sentences - thank you :)
At the following company, the production planning system is run weekly to update the master production schedule and MRP records.
The MPS for end products A, B and C are:
| Week | 4 | 5 | 6 | 7 | 8 | 9 |
| Product A | 11 | - | 26 | 96 | 11 | - |
| Product B | 46 | 11 | - | 21 | - | 21 |
| Product C | 41 | 21 | 71 | 6 | 31 | 61 |
- End product A requires: 2 component D
- End product B requires: 4 components D
- End product C requires: 5 components D
Production and assembly lead time for A, B and C is 1 week, 2 weeks and 3 weeks respectively.
Component D has a lead time of 2 weeks after ordering.
Inventory records show that at the end of week 3 there are 7 units A, 22 units B and 14 units C in stock.
Furthermore, 230 units of C are arriving at the start of week 1.
i) Using an MRP approach assuming lot-for-lot lot sizing, calculate the planned order release for component D. Explain your approach and present your calculations in table format.
ii) Assuming the inventory holding cost for component D is 0.25 per unit per week and fixed cost of placing an order to the supplier is 63.
Calculate the cost of ordering component D according to the lot-for-lot lot sizing rule using part I.
Compare this with a schedule where the lot sizes are determined through the EOQ formula. Do you recommend using EOQ lot sizes?
iii) Assume that the supplier can deliver at most 360 units D per week. Is the planned order release for D from part I feasible?
If not, calculate the best feasible capacity plan for C, assuming the holding cost for C is 0.25 per unit per week and the fixed cost of placing an order to the supplier is 63.
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