Concept explainers
What is the difference between a gross requirements plan and a net requirements plan?
To determine: The difference between gross requirements and the net requirements plan.
Introduction:
Gross requirements plan:
The gross requirements plan is the plan where the independent and dependent demand for a product or a component before the on-hand inventory and the scheduled receipts are netted with.
Net requirements plan:
The net requirements plan is the plan which is established on the gross requirements plan formed by deducting the stock on hand and the scheduled receipts. If the total requirement is below the safety stock levels, a planned order is made based on the given lot sizing technique.
Explanation of Solution
Difference between gross and net requirements concept:
Gross requirements plan | Net requirements plan |
It is the plan which is made prior to subtraction of inventory on hand and scheduled receipts. | It is the plan which will take into considerationof the scheduled receipts and inventory on hand before the plan is made. |
The plan is the requirement which needs to be made and the production to be started. | If the requirement is fewer than the stock, the planned order release will be made for the item. |
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Chapter 14 Solutions
OPERATIONS MGMT.(EBOOK)W/MYOMLAB>IC<
- What is the significance of a Requirements Management Plan (RMP) in complex projects, and how does it ensure requirements are well-defined and properly managed?arrow_forwardWhat are the net requirements of each item in the MPS? Item Net Requirements X A B C D E F Garrow_forwardConsider the following product structure (bill of material). One hundred and fifty (150) units of Product A are needed in week 10. Assuming no on-hand inventory of A exists, explode the bill of material, and use the following information to construct a net requirements plan for all the items. You must use the template provided by the instructor and provide all the information needed on the template. There are no scheduled receipts for all the items. Item On-hand Inventory Lead time (weeks) A 0 2 B 20 2 C 10 1 D 0 3 E 5 1 F 10 3 Item: LT= 1 2 3 4 5 6 7 8 9 10 11 12 Gross Requirements Scheduled Receipts Projected on Hand Net Requirements…arrow_forward
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