Chapter 14 Material Requirements Planning (MRP) andERP lOCi

Problems

Lead Low-AliamiddotLot Item Period (week day) On ~I~Time lJIvOlSize 10Hand Stock catedI ~ Code 1 2 3 4 I 5 6 7 I 8 GrOSS AequiremenlS

Scheduled Receipts

-I jeCtad )ianI If Net AequiramsnifJ _ OrdReooIPts

Planned Or_os

GrOoc~ SC__~

lt ~~) Jbullt fr~On~1f lr~ 1jj~ I~ ~ ~ r_- ~I Net~

0 1I8mod Orlt __il _01lt shy

-

Gross ReqUirements SCIoodoJed Reooip1s

frooeted On _d NeI RequJrl$

Pioolnod ~ optS

Planned Order Re1e~ _

Groos RoqtiftomentsIl SChoduIoQ ReceJpts

H ~r 17~~ On- I shy ~~~ Net~ -

_a-~ ~ I

-Pionnod ~ R _ Gr088 Requirements SChedUled Receipts

ProjeCted On Hand I Net ~quirement~

Planrwd Order Receipts Planned Order Releases

141 You have developed the following simple product slruCmiddot tUfe of items needed for your gift bag for a rush party for prospective pledges in your organization You forecast 200 attendees Assume that there is no inventory on hand of any of the items Explode the bill of material (Subscripts indicate the number of units required)

J MI21

142 You are expected to have the gift bags in Problem 141 ready at 5 PM However you need to personalize the items (monoshy

middotNoemiddot F)cmeans the prohlem may be solved with POM for Windows andor Excel OM Many of the exercises in this chapter (141 through 1416 and 1423 through 1427) can be done on Resource MaMger for Exul a commercial system made available by User Solutions Inc Access to a trial version of the software and a set of notes for the user is available at wwwshyUampersolutionscom

grammed pens note pads literature from the printer etc) The lead time is 1 hour to assemble 200 1s once the other items are prepared The other items will take a while as w~ll Given the volunteers you have the other time estimates are item K (2 hours) item L (1 hour) and item M (4 hours) Develop a lime-phased assembJy plan to preshypare the gift bags

143 The demand for subassembly S is 100 units in week 7 Each unit of S require1Ii 1 unit of T and 2 units of U Each unit of T requires 1 unit of V 2 unats of W and 1 unll of X Finally each unit of U requires 2 units of Y and 3 units of Z One finn manufactures all items It takes 2 weeks to make S 1 week to make T 2 weeks to make U 2 weeks to make V 3 weeks to make W 1 week to make X 2 weeks 0 make y and 1 week to make Z a) Construct a product structure Identify all level6 parents and

components b) Prepare a time-phased product slructure

J 144 Using the information in Problem 143 construct a gross material requirements plan

bullbull 145 Using the infonnation in Problem 143 construct a net material requirements plan using the following on-hand inventory

A FIGURE 1413 MRP Fonn for Homework Problems In Chapter 14

For several problems in this chapter a copy 01 this lorm may be helpful

I

-PART 3 Managing Operations

On-Hand On-Hand

Item Inventory Item Inventory

W 30 T 20 S 20

X 25 U 40 Y 240 V 30 z 40PJc

148 Refer again to Problem~ 143 and 144 In addition to 100 units of S there is also a demand-for 20 units of U which is a component of S The 20 units of U are needed for maintenance purshyposes These units are needed in week 6 Modify the gross nulterial requirements plan to reflect this change ~

147 Refer again to Problems 143 and 145 In addition to 100 units of S there is also a demand for 20 units of U which is a component of S The 20 units of U are needed for maintenance purshyposes These units are needed in week 6 Modify the net material requiremenlS plan to refiect this change PJc

148 As the production planner for Gerry Cook Products Inc you have been given a bill of material for a bracket that is made up of a base two springs and four clamps The base is assembled from one clamp and two housings Each clamp has one handle and onc casting Each housing has two bearings and one shaft There is no inventory on hand a) Design a product structure noting the quantities for each item

and show the lowmiddot level coding b) Detetmine the gross quantities nceded of each item if you are to

assemble 50 brackets c) Compute the net qlantities needed if there are 25 of the base and

100 of the clamp in stock1x

14 Your boss at Gerry Cook Products Inc has just provided you with (he schedule and lead times for the bracket in Problem 148 The unit is to be prepared in week 10 The lead times for the components are bracket (l we~k) base (1 week) spring (I week) clamp (I week) housing (2 weeks) handle (I week) casting (3 weeks) bearing (I week) and shaft (I week) a) PTepllfe the timemiddotphased product structure for the bracket b) In what week do you need to start the castings Pc _ 1410

a) Given the product structure and master production SChedule (Figure 1414 below) develop a gross requirements plan for all items

b) Given the preceding product structure master production sched~ ule and inventory status (Figure 1414) develop a net materials requirements (planned order release) for all items PJc

FICURE 1414 InlOrmalionorProblem1410

bullbullbull 1411 Given the following product structure master produc tion schedule and inventory status (Figure 1415011 the next page)

and assuming the requirements for each BOM item is 1 (a) develop a gross requirements plan for Item C (b) develop a net requirements plan for Item C PJc

middotmiddotmiddot middot1412 Based on the data in Figure 1415compieleanet material requirements schedule for a) AU items (10 schedules in all) assuming the requirement for

each BOM item is I b) All 10 items assuming the requireJltnt for all items is 1 except

B C and F which require 2 each

bull bull bull 1413 Electro Fans has just received an order for one thoumiddot sand 20middotinch fans due week 7 Each fan consists of a housing assembly two grills a fan assembly and an electrical unit The housing assembly consists of a frame two supports and a hlDdie The fan assembly consists of a hub and five blades The electriCll unit consists of a motor a switch and a knob The following tab1e gives lead Limes on~hand inventory and scheduled receipts a) Construct a product structure b) Construct a time~phased product structure c) Prepare a net material requirements plan PJc

Dal TblelOr Problem 1413

Lead On Hand Lol Scheduled Component TIme Inventory Size- Receipt

20 Fan I 100

Housing I 100 Frame 2 Supports (2) I 50 100 Handle I 400 500

Grills (2) 2 200 500

Fan Assembly 3 150 Hub I Blades (5) 2 100

Electrical Unit Motor Switch Knob

20 12 25 200 knobs ill

week 2

middotlotmiddotrormiddotlot unless oeherwisc noted

bull ~ 1414 A pan structurelead time (weeks) and on-hand quan~ tities for product A are shown in Figure l416 From the information shown generate

MaSler Production Schedule for X1

PERIOD 7 8 9 10 11 12

Gross requirements 50 20 100

LEAD ON LEAD ON ITEM TIME HAND hEM TIME HAND

XI I 50 C 0 Bl 2 20 D 0 B2 2 20 E 3 10 AI 5

_-shy

1

Chapter 14 Material Requirements Planning (MRP) and ERP 807

PERIOD 8 9 10 11 12bull FIGURE 4 15 1nformalion tor Problems Gross requirements A 100 SO 1501411 and 1412

Gross requirements H

ON LEAD ITEM HAND TIME

A 0 1 B 100 2 C 50 2 D SO 1 E 75 2

100 SO

O~ LFAD ITEM HAND TIME

F 75 2 G 75 1 H 0 1 J 100 2 K 100 2

I

I 1

I

a) An indenled bill of material for product A (see Figure 59 in Chapter 5 os an egtltample of a 130M)

b) Net require~enls for ~ach part to produce 10 As in week 8 using 10t-for-10t

to f bullbull15 You arc product planner for product A (in Problem 1414 and Figure 1416) The field service manager Al Trostel has just called and told you that the requirements for Band F should each be incrcased by 10 units for his repair requirements in the field a) Prepare a list showing the quantity of each pan required to pro-shy

duce the requirements for the service manager aruJ the producshytion requesl of to Bs and Fs

b) Prepare a oemiddott requirement plan by date for the Dew requirements (for both production and field service) assuming that the field service manager wants his 10 units of Band F in week 6 and the 10 production UllilS of A in week 8 Pc

bullbullbull 1416 You havejusl been notified via fax that the lead time for component G of produCl A (Problem 1415 and Figure 1416) has been increased [04 weeks a) Which items have changed and why b) What are the implications for the production plan c) As production planner what can you do ~

Data Tlble tor PIoblems 1417 tltregh 1419

Period 2 3 4 5 6 7 8 9 10 11 12 Gross

requirements 30 40 30 70 20 10 80 SO

Holding cost =S2s0unillweek setup cost = S 1 SO lead lime = 1 week beginning inventor) = 40

bull bullbull 1411 Develop a lot-for-Iot solution and calculate total releshyvant costs for the data in [he preceding table

~ bullbull 1418 Develop an EOQ solution and calculate toral relevant coSls for the data in the preceding table Stockout costs equal $10 per unit Pc

bull bull bull 1418 Develop a PPB solution and calculate total relevanl costs for the data in the preceding table

bull bull bull 1420 Using the gross requirements schedule in Examples 4 5 and 6 in the text prepare an alternalive ordering system that a1ways orders 100 unit the week prior to a shortage (a fixed order quantity of 100) with the same costs as in Ihe example (setup at $100 each holdinLatSl per unit per period) What i the cost of this ordering system ~

~ FIGURE 14 16 INVENTORYInformalion lor Problems PART ON HAND PART STRUCTURE TREE 14141415 and 1416

A 0

I i B 2

C 10

0 E 4

5

F 5 G H 10

IL ___

L T = lead lime in weeks (1) ~ All quantities ~ 1

I

------------------------------------------------------

808 PART 3 Managing Operations

bull bullbull 1421 Using lbe gross requirements schedule in Examples 4 5 and 6 in the text prepare an alternative ordering system that orders every 3 weeks for 3 weeks ahead (8 periodic order quantity) Use the same costs as in the example (setup at $tOO each hOJdinspt $1 per unit per period) What is the cost of this ordering system ilt

bullbullbull 1422 Using the gross requirements schedule in Examples 4 5 and 6 in the text prepare an alternative ordering system of your own design that uses (he same cost as in the example (setup at SIOO each holding at $1 per unil per period) Can you do better than the costs shown in the text What is the cost of your ordering system

bull bull 1423 Katharine Hepburn In( bull has received the following orders

Period 2 3 4 5 6 7 8 9 10 Order size o 40 30 40 10 70 40 10 30 60

The entire fabrication fol these unill-i is scheduled on one machine There are 2250 usable minutes in a week and each unit will take 65 minutes to complete Develop a capacity plan using lot splitting for Ibe IO-week time period

bull bull 1424 David Jurman Ltd has received the following orders

Period 2 3 4 5 6 7 8 9 10 oder l ne 60 30 10 40 70 10 40 30 40 o

The entire fabrication for lhese units is scheduled on one machine There are 2250 usable minutes in a week and each unit will take 65 minutes 10 complele Develop a capacity plan using lot splitting for the 100week time period

bull 1425 Heather Adams production manager for a Colorado exercise equipment manufacturer needs to schedule an order for 50 UltimaSteppers which are to be shipped in week 8 Subscripts indicate quantity requircd for each parent Assume lot-for-lot ordershying Below i informalion about the steppers

Lead On-Hand IImI time Inventory Components

Stepper A

2 20 10

A(l) Bp ) C(2) 0(1) F(2)

B 2 30 E(I)F(3) C 3 10 D(2)middotE(3) 0 1 15 E 2 5 F 2 20

Cas udies

a) Develop a product structure for Heather b) Develop a time-phased ~tructure

c) Develop a net material requirements plan for F

bullbullbull middot426 You are scheduling production of your popular Rustic Coffee Table The table requires a top four legs i gallon of stain ~ gallon of glue 2 short braces between the legs and 2 long braces between the legs and a brass cap that goes on the bottom of each leg You have J00 gallons of glue in inventory but none of the other components All items except the brass caps stain and glue are ordered on a 10t~for-lot basis The caps are purchased in quantities of 1000 stain and glue by the gallon Lead time is t day for each item Schedule the order releases necessary to produce 640 coffee tables on days 5 and 6 and 128 on days 7 and 8 Px

bull bullbull 1427 Using the data for the coffee table in Problem 1426 build a labor schedule when lbe labor standard for each top is 2 labor hours each leg including brass cap inslallation requires 1hour as does each pair of braces Base a~sembly requires) labor-hour and final assembly requires 2 labor-hours What is the total number of labor-hours required each day and how many employees are needed each day at 8 hours per day~

Iigt Refer to m~b for these additional homework problems 142S-1431

bull HiIIs Automotive Inc_

Hills Automotive Inc i~ an aftermarket producer and distributor downturn in the economy particularly the companys discreshyof automotive repiacenlent parts Art Hill has slowly expanded tionary segment has put downward pressuTC on volume and marshythe business which began as a supplier of hard-lo-get aulo airshy gins Profits have fallen conSiderably In addition customer conditioning units for classic cars and hot rods The finn has limw service levels have declined with late deliveries now exceeding ited manufacturing capability but a state-of-the-art MRP syslem 25 of orders And to make matters worse customer returns have and extensive inventory and as~embly facilities Components are been rising at a rate of 3 per month purchased assembled and repackaged Among its products are Wally Hopp vice president of sales claims that most of the private-label air-conditioning carburetors and ignition kits The problem lies with the assembly department He says that although