Material Requirements Planning Suggested.pdf

1 ISE 4204 – Production Planning and Inventory Control Material Requirements Planning Suggested Problems 0. Friendly reminder to practice the shovel example from class. 1. The product structure diagram is shown on the following page for a telephone produced by Montgomery Phone. The product structure diagram includes the components of the telephone, the quantity of each component required for each phone, and the lead time for each part. The production planning department has developed the forecast by period for the phone as follows: (25 points) Period Forecast 1. 600 2. 1000 3. 1200 4. 1850 5. 1550 6. 2050 7. 1800 The on-hand inventory is: Telephone 1900 Hand Set Assembly 950 Base Assembly 850 Hand Set Cord 1050 Tapping Screw 3800 The scheduled receipts are: Hand Set Assembly 650 in time period 1 Base Assembly 350 in time period 1 Tapping Screw 5000 in time period 1 Given this information, develop the planned order releases for the Telephone, Hand Set Assembly, Base Assembly, Hand Set Cord, and Tapping Screw. All orders are planned using lot-for-lot, except for the Tapping Screw, which has a lot size of 5000.

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3 Telephone Lead Time = 1 wk Lot-for-Lot Time Period 1 2 3 4 5 6 7 Gross Requirements Scheduled Receipts Projected On-hand Inv Net Requirements Time Phased Reqmts Planned Order Releases Planned Order Deliveries Projected Ending Inv Hand Set Assembly Lead Time = 1 wk Lot-for-Lot Time Period 1 2 3 4 5 6 7 Gross Requirements Scheduled Receipts Projected On-hand Inv Net Requirements Time Phased Reqmts Planned Order Releases Planned Order Deliveries Projected Ending Inv Base Assembly Lead Time = 1 wk Lot-for-Lot Time Period 1 2 3 4 5 6 7 Gross Requirements Scheduled Receipts Projected On-hand Inv Net Requirements Time Phased Reqmts Planned Order Releases Planned Order Deliveries Projected Ending Inv

4 Hand Set Cord Lead Time = 2 wks Lot-for-Lot Time Period 1 2 3 4 5 6 7 Gross Requirements Scheduled Receipts Projected On-hand Inv Net Requirements Time Phased Reqmts Planned Order Releases Planned Order Deliveries Projected Ending Inv Tapping Screw Lead Time = 1 week Lot Size = 5000 Time Period 1 2 3 4 5 6 7 Gross Requirements Scheduled Receipts Projected On-hand Inv Net Requirements Time Phased Reqmts Planned Order Releases Planned Order Deliveries Projected Ending Inv

5 2. Based on Problem 8.49 in the text. Assume the time phased net requirements (in thousands) for a component are provided for the next 10 weeks. Assume the setup costs are $200, and the holding costs are $3.25 per thousand units per week. Week 1 2 3 4 5 6 7 8 9 10 Time- phased net reqmts 22 34 32 12 8 44 54 16 76 30 Answer the following questions: (25 points) a) What planned order releases do you obtain using the lot-for-lot approach? b) What planned order releases do you obtain using the EOQ formula? c) What planned order releases do you obtain using the Silver-Meal heuristic? d) What planned order releases do you obtain using the Least Unit Cost heuristic? 3. Using a table format, compare the setup costs and holding costs and the sum of the setup and holding costs over the 10 time periods for each of the five approaches in Problem 2. Which is the preferred approach? (10 points) The table will appear as follows: Approach Setup Costs Holding Costs Setup and Holding Costs Lot-for-Lot Etc. Also, which is the preferred approach?

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