{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

16_posting_-_MRP_2 - Material Requirements Planning(MRP 2...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
10/29/2010 1 Material Requirements Planning (MRP) 2 “The devil is in the details.” Anonymous
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
10/29/2010 2 Lot Sizing Cost per item $10.00 Order or setup cost $47.00 Inventory carrying cost/week 0.50% 1 2 3 4 5 6 7 8 50 60 70 60 95 75 60 55 Weekly net requirements: MRP generates material orders Order sizes/lots can be optimized
Image of page 2
10/29/2010 3 Common Lot Sizing Methods Lot-for-Lot (L4L) Economic Order Quantity (EOQ) Least Total Cost (LTC) Least Unit Cost (LUC)
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
10/29/2010 4 Lot-for-Lot (L4L) Set orders to exactly match needs No carryover to future periods Minimizes carrying costs No consideration for balancing setup/holding 1 2 3 4 5 6 7 8 50 60 70 60 95 75 60 55 Ending inventory 0 0 0 0 0 0 0 0 Holding Cost 0 0 0 0 0 0 0 0 Setup Cost $47 $47 $47 $47 $47 $47 $47 $47 Total Cost $47 $47 $47 $47 $47 $47 $47 $47 Total $376 Weekly net requirements:
Image of page 4
10/29/2010 5 Economic Order Quantity (EOQ) Requires fairly constant demand period-to-period Estimate annual demand and holding costs EOQ = 2DS H D = H =
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
10/29/2010 6 Week 1 2 3 4 5 6 7 8 Net Requirements 50 60 70 60 95 75 60 55 Production Qty 351 0 0 0 0 351 0 0 Ending inventory 301 241 171 111 16 292 232 177 Holding Cost $15.05 $12.05 $8.55 $5.55 $0.80 $14.60 $11.60 $8.85 Setup Cost $47.00 $0.00 $0.00 $0.00 $0.00 $47.00 $0.00 $0.00 Total Cost $62.05 $12.05 $8.55 $5.55 $0.80 $61.60 $11.60 $8.85 Total $171.05 Economic Order Quantity NOTE: Holding cost only applied to inventory held past end-of-week
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern