Question 2 (Total 20 marks). Yat Ching Co. is an authorised company to do the packing of Nissin Instant Noodles for supplying private hospitals in Hong Kong. Yat Ching Co. mainly packs two products, namely a) individual pack (see Figure A), and b) bulk pack (see Figure B). A-T Figure A: Individual Pack Figure B: Bulk Pack I For an individual pack, one piece of finished product will require 1 noodle base, 1 seasoning powder aluminum bag, 1 sesame oil sachet, and 1 outside plastic pocket While for a piece of bulk pack product, there needs 6 noodle bases and one bigger outside plastic pocket (no seasoning powder or 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 the minimum order quantity for the Noodle Base. Please also note the scheduled receipt and projected on hand status.. a) Complete the MRP sheet regarding only the Noodle Base and enter the final answers in the following table. (7 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. [1 [1 1 [1 [ 0. Planned Order Release b) Following on the above information on the noodle base, 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 (EOQ) for each order ii) Calculate the periodic time for Periodic Order Quantity (POQ) (2 marks) (2 marks). Please use all the first 8 weeks' data. Round the answer of order quantity and order interval to an integer. c) Upon working out the MRP under the three different lot sizing strategies, the following is a comparison of their inventory level (termed as Projected on Hand) during the 8 weeks. 3 Week No. 12 2 3. 4 5. 6. 7. 8. L4L 200 200 100 100 100. 160. 100 100. EOQ 200 200 493. 586 186 246 339. 792 TF POQ * 200 200 700 100 100 160 340 100 Hint: POQ needs to adjust the order quantity when there is scheduled receipt in Week 5 as well as the inventory on hand... Please work out the No. of Planned Order Releases during the 8 weeks period for the three lot sizing strategies.. Calculate the total costs (only consider the setup cost plus holding cost) based on i) Lot for Lot, ii) EOQ, and iii) POQ.. Show all your calculations. (Total 6 marks). d) Which lot sizing technique will incur the lowest total costs? (1 mark). e) Some textbook authors say that POQ tends to produce a balance between inventory holding and setup/ ordering costs with no excess inventory; POQ typically performs much better than EOQ lot sizing approach, would you please comment with the results of this case, and provide some reasoning to support your answer? (2 marks) Question 2 (Total 20 marks). Yat Ching Co. is an authorised company to do the packing of Nissin Instant Noodles for supplying private hospitals in Hong Kong. Yat Ching Co. mainly packs two products, namely a) individual pack (see Figure A), and b) bulk pack (see Figure B). A-T Figure A: Individual Pack Figure B: Bulk Pack I For an individual pack, one piece of finished product will require 1 noodle base, 1 seasoning powder aluminum bag, 1 sesame oil sachet, and 1 outside plastic pocket While for a piece of bulk pack product, there needs 6 noodle bases and one bigger outside plastic pocket (no seasoning powder or 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 the minimum order quantity for the Noodle Base. Please also note the scheduled receipt and projected on hand status.. a) Complete the MRP sheet regarding only the Noodle Base and enter the final answers in the following table. (7 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. [1 [1 1 [1 [ 0. Planned Order Release b) Following on the above information on the noodle base, 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 (EOQ) for each order ii) Calculate the periodic time for Periodic Order Quantity (POQ) (2 marks) (2 marks). Please use all the first 8 weeks' data. Round the answer of order quantity and order interval to an integer. c) Upon working out the MRP under the three different lot sizing strategies, the following is a comparison of their inventory level (termed as Projected on Hand) during the 8 weeks. 3 Week No. 12 2 3. 4 5. 6. 7. 8. L4L 200 200 100 100 100. 160. 100 100. EOQ 200 200 493. 586 186 246 339. 792 TF POQ * 200 200 700 100 100 160 340 100 Hint: POQ needs to adjust the order quantity when there is scheduled receipt in Week 5 as well as the inventory on hand... Please work out the No. of Planned Order Releases during the 8 weeks period for the three lot sizing strategies.. Calculate the total costs (only consider the setup cost plus holding cost) based on i) Lot for Lot, ii) EOQ, and iii) POQ.. Show all your calculations. (Total 6 marks). d) Which lot sizing technique will incur the lowest total costs? (1 mark). e) Some textbook authors say that POQ tends to produce a balance between inventory holding and setup/ ordering costs with no excess inventory; POQ typically performs much better than EOQ lot sizing approach, would you please comment with the results of this case, and provide some reasoning to support your answer? (2 marks)
