Question #2:

For the Chairs BOM, represented in Question #1, the Master Production Schedule (MPS) is given as follows. The MPS is based on the companys estimation of Chair demand for weeks 1 through 7.

MPS (includes GR)

Week	1	2	3	4	5	6	7
Chair	0	0	0	100	225	0	45

Inventory Records

Item	Description	SS	Lot Size Rule	LT	SR	OH
Chair	Independent demand	40	EOQ = 100	2 wks	50 in week 3	50
Chair	Independent demand	40	FOQ = 100	2 wks	50 in week 3	50

1. Do the MRP Calculations for Chair based on lot size rule of Economic Order Quantity (EOQ) = 100

Item: Chair SS= 40

Description: Independent Product Lot Size Rule: EOQ = 100

Level: 0 LT = 2 weeks

Weeks		1	2	3	4	5	6	7
GR		0	0	0	100	225	0	45
SR				50
NR
OH	50
PORec
PORel

2. What is total inventory cost over 7 weeks based on the above material requirement plan, if ordering cost is $850 per order and holding cost is $10 per order? (hint: total inventory cost of 7 weeks is the sum of total order cost over 7 weeks and total holding cost over 7 weeks).
3. Do the MRP Calculations for Chair based on lot size rule of Fixed Order Quantity (FOQ) = 100