Production Management

Homework/Assignment 4
Full Name of submitter: Student ID:
Your Group number is: ……..
Title of your Group project is: ……..

Contents of questions

Develop MRP matrix

Exercise 1:

Item = A
LT: 1 week
Week 1 2 3 4 5 6 7 8
Gross requirement 0 0 50 0 250 0 150 0
Scheduled receipts 0 0 0 0 0 0 0 0
Projected on hand 0 0 0 0 0 0 0 0
Net requirements 0 0 0 0 0 0 0 0
Planned receipts 0 0 0 0 0 0 0 0
Planned order release 0 50 0 250 0 150 0 0

Projected on hand calculation = Last Period Closing + Scheduled Receipt + Planned Receipt -
Gross Requirement
Net Requirement = Last Period Closing + Scheduled Receipt - Gross Requirement(If the
above calculation results in negative amount, then such amount is taken as Net Requirement,
else 0)
Planned Receipt = If Net Requirement > 0, Planned Receipt as per Lot Size
Planned Order Release = If Planned Receipt >0, Order as per Lead Time to be placed
Lot size: L4L
Item = B
LT: 2 weeks
Week 1 2 3 4 5 6 7 8
Gross requirement 100 0 500 0 300 0 0
Scheduled receipts 100 0 0 0 0 0 0
Projected on hand 0 0 0 0 0 0 0 0
Net requirements 0 0 500 0 300 0 0
Planned receipts 0 0 500 0 300 0 0
Planned order release 500 0 300 0 0 0 0
 Production Management

Item = C
LLC: 1 & 2 LT: 1 week WEEK
Lot size = 800 1 2 3 4 5 6 7
Gross requirement 0 1050 0 850 0 150 0
Scheduled receipts 0 300 0 0 0 0 0
Projected on hand 120 170 170 120 120 770 770
Net requirements 0 630 0 680 0 30 0
Planned receipts 800 0 0 0 800 0 0
Planned order release 0 800 0 800 0 800 0

Item = D Lot size: L4L

LT: 1 week
Week 1 2 3 4 5 6 7 8

Gross requirement 0 500 300 400 0 0 120 0

Scheduled receipts 0 0 0 0 0 0 0 0

Projected on hand 50 50 50 0 0 0 0 0 0

Net requirements 0 450 300 400 0 0 120 0

Planned receipts 0 450 300 400 0 0 120 0

Planned order release 450 300 400 0 0 120 0 0

Exercise 2: 

Item: A LLC:0     Week          

Lot size: L4L LT:1 1 2 3 4 5 6 7 8
Gross requirement           200     300
Scheduled receipt           0     0
Project on hand           0     0
Net requirement           200     300
Planned order receipt           200     300
Planned order release         200     300  
  
Item: B LLC:1     Week          
Lot size: L4L LT:2 1 2 3 4 5 6 7 8
Gross requirement         200     300  
Scheduled receipt         0     0  
Project on hand         0     0  
Net requirement         200     300  
 Production Management

Planned order receipt         200     300  

Planned order release     200     300      

Item: C LLC:1-2     Week          

Lot size: L4L LT:3 1 2 3 4 5 6 7 8
Gross requirement         200     300  
Scheduled receipt                  
Project on hand                  
Net requirement         200     300  
Planned order receipt         200     300  
Planned order release   200     300        

Item: D LLC:1-2-3     Week            

Lot size: 500 LT:1   1 2 3 4 5 6 7 8
Gross requirement       600     900      
Scheduled receipt       500            
Project on hand    200 200 100 100 600 200      
Net requirement             300      
Planned order receipt           500 500      
Planned order release         500 500        

Item: E LLC:1-2-     Week            

3
Lot size:900 LT:2   1 2 3 4 6 5 7 8
Gross requirement       400   800   600 1200  
Scheduled receipt                    
Project on hand    500 500 100 100 200 50500 200 200
0
Net requirement           700 400   700  
Planned order           900 900   900  
receipt
Planned order       900 900   900      
release

Exercise 3: 

Item A LLC: 0  Week

Lot size: L4L LT: 2 1 2 3 4 5 6 7 8
Gross requirement 0 0 0 95 0 150 0 130
Scheduled receipt 0 0 0 0 0 0 0 0
Project on hand 0 0 0 0 0 0 0 0
Net requirement 0 0 0 95 0 150 0 130
Planned order receipt 0 0 0 95 0 150 0 130
Planned order release 0 95 0 150 0 130 0 0
 Production Management

Item B LLC: 0 Week

Lot size: L4L LT: 1 1 2 3 4 5 6 7 8
Gross requirement 0 0 80 0 0 70 0 0
Scheduled receipt 0 0 0 0 0 0 0 0
Project on hand 0 0 0 0 0 0 0 0
Net requirement 0 0 80 0 0 70 0 0
Planned order receipt 0 0 80 0 0 70 0 0
Planned order release 0 80 0 0 70 0 0 0

Item C LLC: 1-2 Week

Lot size: 250 LT: 2 1 2 3 4 5 6 7 8
Gross requirement 205 270 260 300 70 260 0 0
Scheduled receipt 0 0 0 0 0 0 0 0
Project on hand 625 420 150 140 90 20 10 0 0
Net requirement 0 0 110 160 0 240 0 0
Planned order receipt 0 0 250 250 0 250 0 0
Planned order release 250 250 0 250 0 0 0 0

Item D LLC: 2-3 Week

Lot size: 800 LT: 1 1 2 3 4 5 6 7 8
Gross requirement 250 600 0 550 140 260 0 0
Scheduled receipt 0 0 0 0 0 0 0 0
Project on hand 350 100 300 300 410 410 150 0 0
Net requirement 0 500 0 0 0 0 0 0
Planned order receipt 0 800 0 0 0 0 0 0
Planned order release 800 0 800 0 0 0 0 0

Item E LLC: 2 Week

Lot size: L4L LT: 3 1 2 3 4 5 6 7 8

Gross requirement 0 190 0 300 0 260 0 0

Scheduled receipt 0 200 0 0 0 0 0 0

Project on hand 85 95 95 0 0 0 0 0

Net requirement 0 0 0 205 0 260 0 0

Planned order receipt 0 0 0 205 0 260 0 0

Planned order release 205 0 260 0 0 0 0 0

 Exercise 4:

ITEM: A LLC: 0 PERIOD

 Production Management

LOT SIZE: L4L LT: 4 1 2 3 4 5 6 7 8

Gross Requirements                 103
Scheduled Receipts                  
Projected On Hand 8 8 8 8 8 8 8 8 5
Net Requirements                 100
Planned Order Receipts                 100
Planned Order Releases         100        

ITEM: Q LLC: 0 PERIOD

LOT SIZE: L4L LT: 2 1
5 6 2
7 8 3 4
Gross Requirements               200  
Scheduled Receipts                  
Projected On Hand 6 6 6 6 6 6 6 6 6
Net Requirements               200  
Planned Order Receipts               200  
Planned Order Releases           200      

ITEM: B LLC: 1 PERIOD

LOT SIZE: L4L LT: 3 1 2 3 4 5 6 7 8
Gross Requirements         100        
Scheduled Receipts                  
Projected On Hand 10 10 10 10          
Net Requirements         90        
Planned Order Receipts         90        
Planned Order Releases   90              

ITEM: C LLC: 1 PERIOD

LOT SIZE: L4L LT: 2 1 2 3 4 5 6 7 8
Gross Requirements         200 200      
Scheduled Receipts                  
Projected On Hand 20 20 20 20          
Net Requirements         180 200      
Planned Order Receipts         180 200      
Planned Order Releases     180 200          

ITEM: D LLC: 2 PERIOD

LOT SIZE: 200 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements     180 200          
Scheduled Receipts                  
Projected On Hand     20 20 20 20 20 20 20
Net Requirements     180 180          
Planned Order Receipts     200 200          
 Production Management

Planned Order Releases   200 200            

ITEM: E LLC: 1+2 PERIOD
LOT SIZE: 500 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements     360 400   200      
Scheduled Receipts                  
Projected On Hand 30 30 220 320 320 120 120 120 120
Net Requirements     330 180   0      
Planned Order Receipts     500 500          
Planned Order Releases   500 500            

In conclusion, we have:

Planned Order Report PERIOD

ITEM 1 2 3 4 5 6 7 8
A       100        
Q         200      
B 90              
C   180 200          
D 200 200            
E 500 500            

And in the inventory, there are 5 items A, 6 items Q, 20 items D and 120 items E left.

Exercise 5:

A and B that are made from components C and D

A. Week 5 – 90
B. Week 4 – 195
C. Week 1- 130
D. Week 2- 250, Week 3 – 250
Projected Available Balance = Projected Available Balance of last week + Schedule Receipt
+ Planned Order Receipt - Gross Requirement
Net Requirement = Max (Gross Requirement - Projected Available Balance of last week -
Schedule Receipt)
n: number value per week
Part A: 
Planned Order Release of week n = Net Requirement of week n+3 (LT=3, Lot Size: L4L)
Planned Order Receipt of week n+3 = Planned Order Release of week n
Part A LT=3 Week
Lot size: L4L SS=0 1 2 3 4 5 6 7 8
Gross Requirement 0 0 0 0 0 0 0 100
Schedule Receipt 0 0 0 0 0 0 0 0
 Production Management

Projected Available 10 10 10 10 10 10 10 10 0
Net Requirement 0 0 0 0 0 0 0 90
Planned Order Receipt 0 0 0 0 0 0 0 90
Planned Order Release 0 0 0 0 90 0 0 0
Part B: 
Planned Order Release of week n = Net Requirement of week n+2 (LT=2, Lot Size: L4L)
Planned Order Receipt of week n+2 = Planned Order Release of week n
Part B LT=2 Week
Lot size: L4L SS=0 1 2 3 4 5 6 7 8
Gross Requirement 0 0 0 0 0 200 0 0
Schedule Receipt 0 0 0 0 0 0 0 0
Projected Available 5 5 5 5 5 5 0 0 0
Net Requirement 0 0 0 0 0 195 0 0
Planned Order Receipt 0 0 0 0 0 195 0 0
Planned Order Release 0 0 0 195 0 0 0 0

Part C: 
Gross Requirement = 3* Planned Order Release of part A
Planned Order Release of week n = Net Requirement of week n+4 (LT=4, Lot Size: L4L)
If Net Requirement of week n+4 < 50, then Planned Order Release of week n = 50
Planned Order Receipt of week n+4 = Planned Order Release of week n
Part C LT=4 Week
Lot size: min50 SS=0 1 2 3 4 5 6 7 8
Gross Requirement 0 0 0 0 270 0 0 0
Schedule Receipt 0 0 0 0 0 0 0 0
Projected Available 140 140 140 140 140 0 0 0 0
Net Requirement 0 0 0 0 130 0 0 0
Planned Order Receipt 0 0 0 0 130 0 0 0
Planned Order Release 130 0 0 0 0 0 0 0

Part D:
 Production Management

Gross Requirement = 2* Planned Order Release of part A + 3* Planned Order Release of part
B
Planned Order Release of week n = Multiple of 250 if Net Requirement of week n+2 > 0
(LT=2, Lot Size: 250)
Planned Order Receipt of week n+2 = Planned Order Release of week n
Part D LT=2 Week
Lot size: mult 250 SS=0 1 2 3 4 5 6 7 8
Gross Requirement 0 0 0 585 180 0 0 0
Schedule Receipt 0 250 0 0 0 0 0 0
Projected Available 200 200 450 450 115 185 185 185 185
Net Requirement 0 0 0 135 65 0 0 0
Planned Order Receipt 0 0 0 250 250 0 0 0
Planned Order Release 0 250 250 0 0 0 0 0
Exercise 6:

Period 1 2 3 4 5
Demand 20 40 30 10 50
Cc = $1
Co = $100
D = 30
Item LLC: 0 Period
Lot size: L4L LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 50
Scheduled Receipts
Projected on hand 25 5 0 0 0 0
Net Requirements 0 35 30 10 50
Planned Order Receipts 0 35 30 10 50
Planned Order Releases 35 30 10 50
Total cost of L4L = (4 X $100) + 5 X $1 = $405

b)
77.4596
EOQ = 7 ~ 78

Item LLC: 0 Period

Lot size: EOQ 78 LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 50
Scheduled Receipts
Projected on hand 25 5 43 13 3 31
Net Requirements 0 35 0 0 47
Planned Order Receipts 78 0 0 78
Planned Order Releases 78 0 0 78
 Production Management

Total cost of EOQ = (2 X $100) + [(5 + 43 + 13 + 3 +31) X $1] = $295

c)
POQ = 2.581989 Requirement ~ 3 periods worth of requirement

Item LLC: 0 Period

Lot size: POQ LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 50
Scheduled Receipts
Projected on hand 25 5 40 10 0 0
Net Requirements 75 50
Planned Order Receipts 75 50
Planned Order Releases 75 50

Total cost of POQ = (2 X $100) + [(5 + 40+10) X $1] = $255