This is a Master's level question.

Discussion - MRP as Production System

ABC Table Inc. is high-end table manufacturer located at Saigon, Vietnam. ABCs table production workshop utilizes Material Planning Requirement (MRP) as its production system to assemble all its tables. Among ABCs list of products is the Round Marble antique table (RM) that carters to wealthy and conservative consumers.

Assembly of MA requires highly skilled labors and high quality parts (eg; marble and red wood). External lead time for these inputs encompasses mainly transportation time from local suppliers. Internal lead time, duration required to assemble a component from parts, is estimated based on ABCs production historical data. The listed unit cost for each part is standard price provided by respective supplier, where quantity discount is yet to be factored in.

Listed below are;

1. Bill of material (BOM) of RM
2. Unit cost and Lead time (internal & external) for components/parts of RM

Item	Lead time (days)	Unit cost ($)
RM	12
B1	5
B2	7
B3	8
C1	23	80
C2	28	210
C3	26	380

Prepare a write-up that address the following discussion questions;

1. Material Requirement Planning as a Production System
   1. Base on your assigned case, answer the following questions;
      1. Determine the material cost of C1 and C2 required to assemble 56 units of RM
      2. Determine when C3 need to be on-hand and on-order, if 56 units of RM need to be on-hand at t=150? Assume that now is t = 0 and there is zero inventory for all components. Draw a table with only necessary components to illustrate your calculation.
      3. Determine when is the earliest t, where 56 units of RM can be on hand? Assume that now t = 0 and there is zero inventory for all components. Draw a table with only necessary components to illustrate your calculation.

1. Referring to chapter 4, explain the assumption of Lead time caters to unlimited quantity from the perspective of internal lead time and external lead time. Support each explanation with an intuitive example.
2. Using the assumption of zero inventory for all components, the estimated earliest completion time for a finished good to be on hand, is found to be = X. If it was discovered that some components within the BOM currently has on hand stock or inventory level > zero, is X still valid? Justify your conclusion. Assume the two assumptions of Lead Time, discussed in chapter 4, are both valid.

Grading criterion

Q2a Please ensure that;

• sufficient calculation steps are shown, for partial credit. Please refer to notes for format of calculation steps
• Excel or writeup, without clear calculation steps is not acceptable
• Tables have clear indicator of time unit, component types, on-hand and on-order

Q2c Note that the component with inventory level > zero is not being identified. Please ensure that your justification clearly link towards your conclusion. If applies, do highlight additional assumptions/ conditions you made in your justification.