MRP EXERCISE

2nd Part.

PROBLEM Nº 7 (SOLUTION)

• A company that manufactures product X and Y has the following information:Products X and Y Period

4 5 6 7Gross

requirement of X  50   150

Gross requirement of Y

100   50  

Item On hand inventory

Lead Time Components

X 0 1 A (1), B (1)Y 0 1 B(1), F (1)A 100 2 C(1), D(1)B 25 1 E(1), F (1)C 50 1  D 75 2  E 75 1  F 115 1  

You are asked to:

1. Elaborate the product tree structure and represent the level code.2. Besides the requirements for X and Y, there exits also a demand of 30 units for item D (sold externally) in week 5. Modify the Gross Requirement to reflect this change and elaborate the Net Requirement Plan

PROBLEM Nº 7 (SOLUTION)

• 1. Elaborate the product tree structure and represent the level code.

X Y

A B B F

DC E F E F

PROBLEM Nº 7 (SOLUTION)

There exists an extra demand of 30 units (ítem D). Additionally all ítem follows the lot-for-lot technique, excepts ítem F, which follows optimal order quantity technique. Order cost =140 m.u , holding cost: 1 m.u

ITEM X 1 2 3 4 5 6 7GROSS REQ. 50 150

PLANNED RECEIPTAVAILABILITY

NET REQ. 50 150PLANNED ORD R. 50 150

PLANNED ORD. RE 50 150

WEEKS

ITEM Y 1 2 3 4 5 6 7GROSS REQ. 100 50

PLANNED RECEIPTAVAILABILITY

NET REQ. 100 50PLANNED ORD R. 100 50

PLANNED ORD. RE 100 50

WEEKS

-The Gross requirement (GRP) for these to table will be directly subtracted from the exercise.

Always the GRP of the ítem from the top will be directly given.

-The lead time in both ítem: 1 week.

PROBLEM Nº 7 (SOLUTION)

• For product X is required ítem A and B.

ITEM A 1 2 3 4 5 6 7GROSS REQ. 50 150

PLANNED RECEIPTAVAILABILITY 100 100 100 100 50 50

NET REQ. 100PLANNED ORD R. 100

PLANNED ORD. RE 100

WEEKS

ITEM B 1 2 3 4 5 6 7GROSS REQ. 100 50 50 150

PLANNED RECEIPTAVAILABILITY 25 25 25

NET REQ. 75 50 50 150PLANNED ORD R. 75 50 50 150

PLANNED ORD. RE 75 50 50 150

WEEKS

-The Gross requirement in ítem A will be subtracted from the orders planned of product X. In the case of ítem B, the GRP will include the order planned for product X and Y.

-Availability is given by the exercise (there no safety stock in this exercise).

-Lead time is two week for ítem A, and one week for ítem B.

PROBLEM Nº 7 (SOLUTION)

• Item F Special characteristic (follows a fixed order quantity technique). ITEM F 1 2 3 4 5 6 7

GROSS REQ. 75 150 50 200PLANNED RECEIPT

AVAILABILITY 115 115 40 10 80NET REQ. 110 40 120

PLANNED ORD R. 120 120 120PLANNED ORD. RE 120 120 120

WEEKS -The Gross requirement in ítem F will be subtracted from the orders planned of product H, from ítem B (x2).

-Availability is given by the exercise (there no safety stock in this exercise).

-Lead time is two week for ítem B, and one week for ítem C.

The planned order will be the one that minimize the cost of holding inventories. Optimal quantity =

Q = ROOT ((2 X Ce x D) / Cp x Ɵ )

Q=ROOT (( 2 x 140 x 120) / 1 x 7) = 120

PROBLEM Nº 7 (SOLUTION)

• 2nd level : For making ítem A is required ítem C and D.

ITEM C 1 2 3 4 5 6 7GROSS REQ. 100

PLANNED RECEIPTAVAILABILITY 50 50 50 50

NET REQ. 50PLANNED ORD R. 50

PLANNED ORD. RE 50

WEEKS

ITEM D 1 2 3 4 5 6 7GROSS REQ. 100 30

PLANNED RECEIPTAVAILABILITY 75 75 75 75

NET REQ. 25 30PLANNED ORD R. 25 30

PLANNED ORD. RE 25 30

WEEKS

-Gross req: ítem C will be subtracted from planned order of ítem A. And for ítem D from planned orders of ítem A.

-Availabilities: given.

-Net req: Gross req. Availabilities.

-Lead time: ítem C (1 weeks); ítem D (2 week).

PROBLEM Nº 7 (SOLUTION)

• For making ítem B is required ítem E.

ITEM E 1 2 3 4 5 6 7GROSS REQ. 75 50 50 150

PLANNED RECEIPTAVAILABILITY 75 75

NET REQ. 50 50 150PLANNED ORD R. 50 50 150

PLANNED ORD. RE 50 50 150

WEEKS-Gross req: ítem E will be subtracted from planned order of ítem B (x2).

-Availabilities: given.

-Net req: Gross req. Availabilities.

-Lead time: ítem E (1 week).

THANKS FOR YOUR ATTENTION