Question

TASK:   Complete the MRP record for component C as it would appear at the beginning of week 2.

MRP record for component C as it would appear at the beginning of week 1.

Week	1	2	3	4	5	6
Gross Requirements	15	30	25	25	10	20
Scheduled Receipts	40	0	0	0	0	0
Projected Available Balance	50	20	35	10	0	20
Planned Order Receipts	0	0	40	0	0	40
Planned Order Releases	40	0	0	40	0	0

During week 1, the following transactions occurred for component C:

• The open order for 40 units due to be received at the start of week 1 was received on Monday of week 1 with a quantity of 35 (5 units of component C were scrapped on this order).
• An inventory cycle count during week 1 revealed that ten units of component C were missing. Thus, an inventory adjustment of -10 was processed.
• Five units of component C were actually disbursed (instead of the 15 units planned for disbursement to produce end products X and Y). (The MPS quantity of 10 in week 1 for product X was canceled as a result of a customer order cancellation.)
• The MPS quantities for week 7 include 20 units for product X and 10 units for product Y.
• Because of a change in customer order requirements, marketing has requested that the MPS quantity of 5 units for product X scheduled in week 4 be moved to week 3.
• An order for 40 units was released.

Given this information, complete the MRP record for component C as it would appear at the beginning of week 2:

Week	2	3	4	5	6	7
Gross Requirements
Scheduled Receipts
Projected Available Balance
Planned Order Receipts
Planned Order Releases

Answer 1

Please refer the formulas below for general calculations in MRP table:

t = current week

t-1 = previous week

scheduled receipt = SR (if given)

On-hand inventory / projected ending inventory (t) = on-hand inventory (t-1) - gross requirement (t)

(if on-hand inventory (t-1) > gross requirement (t))

On-hand inventory / projected ending inventory (t) = 0 (if on-hand inventory (t-1) <= gross requirement (t))

Net requirement (t) = 0 (if, on-hand inventory (t-1) >= gross requirement (t))

Net requirement (t) = Gross requirement (t) – [on-hand inventory (t-1) + scheduled receipt] (if, on-hand inventory (t-1) + SR(t) < gross requirement (t))

Planned receipt (t) = Net requirement (t)

Planned order release = Planned receipt (t), but offsetted ahead by lead time (i.e. Lead time 2, planned order release will be offsetted by 2 weeks)

MRP TABLE FOR C

Gross requirement in week 1:

As explained in question = 5 =15 - 10 ( The MPS quantity of 10 in week 1 for product X was canceled as a result of a customer order cancellation )

Scheduled receipt in week 1 = 25 = 40 - 5 (scrapped) - 10 (wrong count)

From the MRP in question we see....that there was an ending inventory of 25 already in week 1 (Monday). Hence, the projected available balance in week 1 (1st day) = scheduled receipt - gross requirement + Ending inventory (last week) = 25 - 5 + 25 = 45

Now, follow the formulas to calculate the cells of table.

Gross requirement of week 3 = 25 +5 =30

Gross requirement of week 4 =25 - 5 =20

Reason: marketing has requested that the MPS quantity of 5 units for product X scheduled in week 4 be moved to week 3.

Gross requirement in week 7 = 20 + 10 = 30

Reason: The MPS quantities for week 7 include 20 units for product X and 10 units for product Y

In the MRP Table the cell in green, is when 40 units has been released in week 3 to meet the demand of week 5.