Problem #$2$

Last month, Dan Nussman, the production control director at H&P Manufacturing, read an article on time$-$phased requirements planning. He was curious about how this planning technique might work in scheduling H&P Manufacturing$$s engine assembly operations and decided to prepare an example to illustrate the use of time phased requirements planning.

Dan's first step was to prepare a master schedule for one of the engine types produced by H&P Manufacturing: the Model $1000$ engine. This schedule indicates the number of units of the Model $1000$ engine to be assembled each week during the last $12$ weeks and is shown on the next page. Next, Dan decided to simplify his requirements planning example by considering only two of the many components that are needed to complete the assembly of the Model $1000$ engine. These two components, the gear box and the input shaft, are shown in the product structure diagram shown below. Dan noted that the gear box is assembled by the Subassembly Department and subsequently is sent to the main engine assembly line. The input shaft is one of several component parts manufactured by H&P Manufacturing that are needed to produce a gear box subassembly. Thus, levels $0,1,$ and $2$ are included in the product structure diagram to indicate the three manufacturing stages that are involved in producing an engine: the Engine Assembly Department, the Subassembly Department, and the Machine Shop.

The manufacturing lead times required to produce the gear box and input shaft components are also indicated Problem #$2$

Last month, Dan Nussman, the production control director at H&P Manufacturing, read an article on time$-$phased requirements planning. He was curious about how this planning technique might work in scheduling H&P Manufacturing$$s engine assembly operations and decided to prepare an example to illustrate the use of time phased requirements planning.

$$

$$Dan$\text{'}$s first step was to prepare a master schedule for one of the engine types produced by H&P Manufacturing: the Model $1000$ engine. This schedule indicates the number of units of the Model $1000$ engine to be assembled each week during the last $12$ weeks and is shown on the next page. Next, Dan decided to simplify his requirements planning example by considering only two of the many components that are needed to complete the assembly of the Model $1000$ engine. These two components, the gear box and the input shaft, are shown in the product structure diagram shown below. Dan noted that the gear box is assembled by the Subassembly Department and subsequently is sent to the main engine assembly line. The input shaft is one of several component parts manufactured by H&P Manufacturing that are needed to produce a gear box subassembly. Thus, levels $0,1,$ and $2$ are included in the product structure diagram to indicate the three manufacturing stages that are involved in producing an engine: the Engine Assembly Department, the Subassembly Department, and the Machine Shop.

$$

$$The manufacturing lead times required to produce the gear box and input shaft components are also indicated in the bill$-$of$-$material diagram. Note that two weeks are required to produce a batch of gear boxes and that all the gear boxes must be delivered to the assembly line parts stockroom before Monday morning of the week in which they are to be used. Likewise, it takes three weeks to produce a lot of input shafts, and all the shafts that are needed for the production of gear boxes in a given week must be delivered to the Subassembly Department stockroom before Monday morning of that week.

$$

$$In preparing the MRP example Dan planned to use the worksheets shown below and to make the following two assumptions:

$$ Seventeen $(17)$ gear boxes are on hand at the beginning of Week $1,$ and five $(5)$ gear boxes are currently on order to be delivered at the start of Week $2.$

$$ Forty $(40)$ input shafts are on hand at the start of Week $1,$ and twenty two $(22)$ input shafts are scheduled for delivery at the beginning of Week $2.$ Gear Box Requirements

Week:

Week: Requirements

Scheduled Receipts

Projected Available Balance

Net Requirements

Planned Order Receipt

Planned Order Release

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Input Shaft Requirements

Week:

Gross Requirements

Scheduled Receipts

Projected Available Balance

Net Requirements

Planned Order Receipt

Planned Order Release

Dan would like to consider the costs that his accountants are currently using for inventory carrying and setup for the gear boxes and

input shafts. These required costs are as follows:

b$.$ Given the cost structure, evaluate the cost of the schedule from $($a$).$ Assume inventory is valued one time at the end of each week.