Question

Product Y is made from one component P, three components Q, and one 2 components R.  P is made from two parts S, Q is made from one S, and R is made from two part S and three part T.  Other data includes:

Part                 Lead time             Lot size                   On hand                 Scheduled receipts         Safety Stock

Y                         1                                 lot-for-lot               30                                              none                                          5

P                        2                                   40                              15                                              none                                          none

Q                        2                                 100                               8                                               none                                          8

R                        3                                 120                             30                                              none                                          none

S                         2                                 500                             20                                              500, week 1                          20

T                         2                                 600                           370                                             none                                          50

a.    Draw the BOM for product Y.

b. Complete the MRP explosion for product Y.  Identify any problems, and discuss possible solutions

Master Production Schedule
Finished Item Y		1	2	3	4	5	6	7	8	9	10
Finished Item Y MPS Start		30	30	30	30	30	30	30	30

Item Y                     Lead time = 1 week          Minimum order quantity = Lot for Lot Safety Stock = 5    

Week	1	2	3	4	5	6	7	8	9	10
Gross Requirements
Scheduled Receipts
Proj. ending inv.              30
Net Requirements
Planned Receipts
Planned Order Releases
Service Requirements

Answer 1

a) BOM for product Y is following

b) MRP record for product Y and its components is following

There are following problems:

i) There is no safety stock of product Y in week 1

ii) Net requirement of components P, Q, S and T in week 1 and 2, cannot be satisfied until week 3, because of lead time of 2 weeks

iii) Net requirement of components R in week 1, 2 and 3, cannot be satisfied until week 4, because of lead time of 3 weeks.

Possible solution is purchase of these components from outside supplier.