XYZ Limited is a medical equipment manufacturer in Victoria. The company received three orders from a local hospital. The order information is listed in Table 2 below. The product information is summarized in Table 3 below. In addition, there are 300 units of item G, 200 units of item H, 100 units of item J, 100 units of item Mask-II Special Edition, 50 units of item L, 3 units of item Ventilator Small, 10 units of item M, and 5 units of item N on hand. The holding cost of each item is AU$0.5/week, and the setup cost is AU$100. We assume that there are 52 weeks in a year.

 

Table 2. Order information
Order	Item category	Item version/edition	Order quantity	Expected delivery week (at the beginning of)
1	Mask-I	Size S	700	Week 6
2	Mask-II	Special Edition	500	Week 8
3	Ventilator	Small	20	Week 8

 

Table 3. Product information
Item	Lead time (weeks)	Components
Mask-I Size S	1	H (2), G (3)
G	2	H (3), J (1)
H	1	-
J	2	-
Mask-II Special Edition	1	L (3), K (2)
K	1	L (1), J (2)
L	3	-
J	2	-
Ventilator Small	2	M (2), N (1)
M	3	N (1), O (2)
N	1	-
O	1

 

Questions:

(a) Develop and draw the product structure for the item Ventilator Small. 

(b) Develop material requirements plan for the item J using the lot-for-lot technique. 

(c) Develop material requirements plan for the item J using the EOQ technique.  

(d) Please compare the costs of using lot-for-lot and EOQ technique and assist the operations manager in identifying a reasonable lot sizing technique for item J based on your calculations and explain why. 

Answer rating: 100% (QA)

A Product structure is also called a BOM diagram which helps ... View the full answer