Question

An assembly component A uses 2 units of another component B. Component A has the planned...

An assembly component A uses 2 units of another component B. Component A has the planned order release of 36 and 62 units at week 3 and week 4 respectively. The company expects an on hand inventory of 96 units of B at the end of week 2 and a scheduled receipt of 12 units of B from an outside supplier at the start of week 3. What will be the net requirement of component B at week 4?

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Answer #1

Since each component of A requires 2 units of B, taking into account planned order release of component A , we can say :

Planned order release for component B at week 3 = 36 x 2 = 72

Planned order release for component B at week 4 = 62 x 2 = 124

Expected inventory of B at week 3

= 96 ( on hand inventory ) + 12 ( scheduled receipts)

= 108

108 units fully cater to 72 units requirement at week 3 and left with = 108 – 72 = 36 units for week 4

However gross requirement for week 4 = 124

Net requirement for week 4 for component B = 124 – 36 = 88

NET REQUIREMENT OF COMPONENT B AT WEEK 4 = 88

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