Question 2 - about MRP and Lot Sizing (Total 20 marks) Winner Foods Co. is selling the Dolls Brand Instant Noodles for various flavors to retailers and customers in Hong Kong. For the Cheesy Lobster flavour, Winner mainly packs two products, namely a) individual pack (see Figure 2A), and b) bulk pack (see Figure 20). For an individual pack, one piece of finished product will require 1 noodle block, 1 seasoning powder aluminum pouch, 1 sesame oil sachet, and 1 small outside plastic pocket (see Figure 2A &2B) A320 SIR Figure 2A Figure 2B Figure 20 While for a bulk pack product, there needs 6 noodle blocks (also called the noodle bases) and one big outside plastic pocket (no seasoning powder nor sesame oil required) The Bill of Materials for both packing versions can be referred as follows: Ind. Pack Bulk Pack Noodle Base x1 Seasoning Powder Bag x1 Sesame oil Sachet x1 Small Outside Pocket x1 Noodle Base x6 Big Outside Pocket x1 The following is the Master Production Schedule (MPS) data of both products as well as the lot size, lead time, safety stock requirement and minimum order quantity for the Noodle Block. Please also note the scheduled receipt and projected on hand status. MRP worksheet 5 1. MPS Data for Individual Pack Product Week number 1 2 Gross Requirements Planned order releases 400 3 400 600 4 600 Lead Time: 1 week 6 7 8 400 600 400 600 Lead Time: 1 week 5 8 70 90 40 90 40 2. MPS Data for Bulk Pack Product Week number 2 3 4 Gross Requirements Planned order releases 70 Part name: Noodle Block Minimum order quantity: 100 units Immediate Parent(s): 1 per Ind. Pack and 6 per Bulk pack Week number 1 2 Gross Requirements Scheduled Receipts Projected on hand 200 Net Requirements Planned order receipts Planned order releases Lot size: L4L Lead time: 1 week Safety stock: 100 units 4 5 6 7 8 1000 a) Complete the MRP sheet regarding only the Noodle Block and enter the final answers in the following table. (9 marks) (Tips: you may like to use the above worksheet to do the MRP calculations and then copy the last line results to this table) Week No. 1 2 3 4 5 6 7 8 planned 3000 ((((( Order Release b) Following on the above information on the noodle Block, calculate the EOQ and POQ lot sizing quantities if the Holding cost = $1/unit/week and Setup cost = $600. i) Calculate the Economic Order Quantity (EOC) for each order ii) Calculate the periodic time for Periodic Order Quantity (POO) (2 marks) (2 marks) Please use all the first 8 weeks' data. Round the answer of order quantity and order interval to an integer, i.e. O decimal place. c) The following is a comparison of their inventory level (termed as Projected on Hand) during the 8 weeks for the three different lot sizing strategies: 3 4 5 6 7 8 Week 1 2 No. L4L 200 200 100 100 100 100 100 100 EOQ 200 200 493 586 166 226 319 772 Poo* 200 200 700 100 100 160 340 100 * Hint: POQ needs to adjust the order quantity when there scheduled receipt in Week 5 as well as the inventory on hand. Work out the No. of Planned Order Releases during the 8 weeks period for the three lot sizing strategies. Calculate the total costs (consider the setup cost plus holding cost only) based on the holding cost = $1/unit/week and setup cost = $600 which are the same for all L4L, EOQ and POQ calculations: 1) Lot for Lot ii) EOQ, and ) POQ. Show all the steps of your calculations. (Total 6 marks) d) Which lot sizing technique will incur the lowest total costs? (1 mark)