Confirming Pages

Chapter Twelve MRP and ERP 545

braces. Lead times (in days) for all items are shown in the following table. Prepare a material require-
ments plan using lot-for-lot ordering.

Quantity Lead Time Table

1–200 1
Wood sections (2) Braces (3) Legs (4)
201–550 2
551–999 3

7. Eighty units of end item X are needed at the beginning of week 6, and another 30 units are needed
at the beginning of week 8. Prepare a material requirements plan for component D. D can only be
ordered in whole cases (50 units per case). One case of D is automatically received every other week,
beginning in week 1 (i.e., weeks 1, 3, 5, 7). Also, there are 30 units of B and 20 units of D now on
hand. Lead times for all items are a function of quantity: one week for up to 100 units, two weeks for
101 to 200 units, three weeks for 201 to 300 units, and four weeks for 301 or more units.

B(2) D(3)

D(2) F(2)

8. Oh No!, Inc., sells three models of radar detector units. It buys the three basic models (E, F, and G)
from a Japanese manufacturer and adds one, two, or four lights (component D) to further differenti-
ate the models. D is bought from a domestic producer.

A B C

D E D(2) F D(4) G

Lead times are one week for all items except C, which is two weeks. There are ample supplies
of the basic units (E, F, and G) on hand. There are also 10 units of B, 10 units of C, and 25 units of
D on hand. Lot-sizing rules are lot-for-lot ordering for all items except D, which must be ordered in
multiples of 100 units. There is a scheduled receipt of 100 units of D in week 1.
The master schedule calls for 40 units of A to be produced in week 4, 60 units of B in week 5, and
30 units of C in week 6. Prepare a material requirements plan for D and its parents.
9. Assume that you are the manager of a shop that assembles power tools. You have just received an
order for 50 chain saws, which are to be shipped at the start of week 8. Pertinent information on the
saws is

Lead Time
Item (weeks) On Hand Components

Saw 2 15 A(2), B(1), C(4)

A 1 10 E(3), D(1)
B 2 5 D(2), F(3)
C 2 65 E(2), D(2)
D 1 20
E 1 10
F 2 30

a. Develop a product structure tree, an assembly time chart, and a master schedule.
b. Develop the material requirements plan for component E using lot-for-lot ordering.
c. Suppose now that capacity to produce part E is limited to a maximum of 100 units per period.
Revise the planned-order releases for periods 1 through 4 so that the maximum is not exceeded
in any period, keeping in mind an objective of minimizing carrying costs. The quantities need not
be equal in every period. Note that the gross requirements for E will remain the same. However,
quantities in some of the other rows will change. Determine the new cell values for those rows.

ste25251_ch12_508-553.indd 545 12/15/10 7:00:50 PM