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Inventory forecasts indicating projected inventory

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± 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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19 Solution Period 1 2 3 4 5 6 7 8 9 10 Item: Product P 1 Gross Requirements 50 100 Schedule Receipts O n H a n d 0 Net Requirements 50 100 P l a n n e d O r d e r R e l e a s e 5 0 1 0 0 Item: Product P 2 Gross Requirements 70 80 25 Schedule Receipts Week number 6 7 8 9 10 Product P 1 50 100 Product P 2 70 80 25 etc, Period 1 2 3 4 5 6 7 Item: Raw Matl M 4 Gross 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
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20 O n H a n d 0 N e t R e q u i r e m e n t s Planned Order Release 70 80 25 7 0 8 0 2 5 Item: Subassby S 2 Gross Requirements 100 200 Schedule Receipts O n H a n d N e t R e q u i r e m e n t s Planned Order Release 100 200 100 200 Item: Subassby S 3 Gross Requirements 70 80 25 Schedule Receipts O n H a n d N e t R e q u i r e m e n t s Planned Order Release 70 80 25 70 80 25 Item: Component C 4 Gross Requirements 70 280 25 400 Schedule Receipts O n H a n d N e t R e q u i r e m e n t s Planned Order Release 70 280 25 400 70 280 25 400 Item: Raw Matl M 4 Gross Requirements 70 280 25 400 Schedule Receipts 40 On Hand 90 20 Net Requirements -20 260 25 400 Planned Order Release 260 25 400 11. Master production schedule for products P1 are 50 at 8 th week and 100 at 10 th week and for product P2 are 50 at 7 th week and 100 at 9 th week. Product structure for P1 and P2 are as follows: C4(1) & C6(2) = S3(1) = P2 C4(2) & C6(1) = S2(2) = P1 Component of raw material is M4. Two unit of M4 is needed to produce one unit of C4. The raw material used in component C 6 is M6. One unit of C6 is obtained from two units of M6. Lead times are as follows: P1: assembly lead time = 1 week P2: assembly lead time = 1 week S2: assembly lead time = 1 week S3: assembly lead time = 1 week
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