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.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!