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Exception reports, showing deviations from the schedule, orders that are overdue scrap, etc. Inventory forecasts, indicating projected inventory levels in future period. There are many benefits claimed for a well designed material requirements planning system. The benefits reported by users include the following reduction in inventory quicker response to change in demand than is possible with a manual requirements planning system, reduced setup and product changeover costs better machine utilization improve capacity to respond to changes in the master schedule and as an aid in the development of the master schedule. 10. To illustrate how MRP works let us consider the requirements planning proceeded for one of the components of product PI. The components we will consider a C4. This part happens to be used also on one other product P2 (see figure). However, only one of item C4 is used on each P2 produced. The product structure of P2 is given in Figure 1. Component C4 is made out of raw materials M4. One unit of M4 is needed to produce 1 unit of C4. Find the ordering and manufacturing lead times and make the MRP computations? (20 marks) The current inventory order and status of item M4 is in Figure. There are no stocks or orders for any of the other items listed below: P1: assembly lead time = 1 week P2: assembly lead time = 1week S2: assembly lead time = 1week S3: assembly lead time = 1 week C4: manufacturing lead time = 2 weeks M4: ordering lead time = 3weeks
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19SolutionPeriod 1 2 3 4 5 6 7 8 9 10 Item: Product P1Gross Requirements 50 100 Schedule Receipts On Hand 0 Net Requirements 50 100 Planned Order Release 50 100 Item: Product P2Gross Requirements 70 80 25 Schedule Receipts Week number 6 7 8 9 10 Product P150 100 Product P270 80 25 etc, Period 1 2 3 4 5 6 7 Item: Raw Matl M4Gross Requirements Schedule Receipts 40 On Hand 50 90 Net Requirements Planned Order Release P2 S4 S3 C4 C6 C7 C2 C8 (1) (1) (2) (2) (2) (1) (1) Figure