Question

# Problem 5 Eighty units of end item E are needed at the beginning of week 6....

Problem 5

Eighty units of end item E are needed at the beginning of week 6. Three cases (30 units per case) of J have been ordered and one case is scheduled to arrive in week 3, one in week 4, and one in week 5. Note: J must be ordered by the case, and B must be produced in multiples of 120 units. There are 60 units of B and 20 units of J now on hand. Lead times are two weeks each for E and B, and one week for J.

 a. Prepare a material requirements plan for component J. b. Suppose that in week 4 the quantity of E needed is changed from 80 to 70. The planned-order releases through week 3 have all been executed. How many more Bs and Js will be on hand in week 6?

Can someone please explain the formulas, and how to get the actual numbers needed to complete the problem? I get the concept, but struggling with the calculations needed to complete the problem.

Step-by-step solution

1. Step 1 of 4

Master production schedule (MPS)

This is the schedule made or plan executed, that determines the level of production, staffing, and inventory required to be maintained. This also helps in determining the bottleneck and estimating the demand level as and when may be needed.

Material requirements planning (MRP)

In MRP, requirements for MPS is planned in phased-wise manner thereby planning for components, sub-assemblies and parts.

Comment

2. Step 2 of 4

Formulas used for calculations are as follows:

POH = Planned-on-hand inventory

POH (current period) = POH +planned-order receipts – Gross requirements (previous period) + schedule receipts (current period)

Net requirement = Gross requirements – available inventory

Available inventory = POH – safety stock – inventory allocated for other items

Comment

3. Step 3 of 4

a.

Eighty (80) cases of the end item are required at the beginning of week 6.

Three (3) cases, 30 units per case, of J have been ordered, one each to arrive in weeks 3, 4 and 5.

Comment

4. Step 4 of 4

b.

Thus, it can be observed that additional units of B and J required are 20 and 30 units respectively.

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