Question

One unit of A is composed of two units of B and three units of C. Each B is composed of one unit of F. C is made of one unit of D, one unit of E, and two units of F. Items A, B, C, and D have 10, 60, 60, and 25 units of on-hand inventory, respectively. Items A, B, and C use lot-for-lot (L4L) as their lot-sizing technique, while D, E, and F require multiples of 60, 110, and 90, respectively, to be purchased. B has scheduled receipts of 30 units in Period 1. No other scheduled receipts exist. Lead times are one period for Items A, B, and D, and two periods for Items C, E, and F. Gross requirements for A are 10 units in Period 1, 20 units in Period 2, 60 units in Period 6, and 40 units in Period 8.

Find the planned order releases for all items. (Leave no cells blank - be certain to enter "0" wherever required.)

	Period	1	2	3	4	5	6	7	8
Item A OH = 10 LT = 1 SS = 0 Q = L4L	Gross requirements
	Scheduled receipts
	Projected available balance
	Net requirements
	Planned order receipts
	Planned order releases
Item B OH = 60 LT = 1 SS = 0 Q = L4L	Gross requirements
	Scheduled receipts
	Projected available balance
	Net requirements
	Planned order receipts
	Planned order releases
Item C OH = 60 LT = 2 SS = 0 Q = L4L	Gross requirements
	Scheduled receipts
	Projected available balance
	Net requirements
	Planned order receipts
	Planned order releases
Item D OH = 25 LT = 1 SS = 0 Q = 60	Gross requirements
	Scheduled receipts
	Projected available balance
	Net requirements
	Planned order receipts
	Planned order releases
Item E OH = 0 LT = 2 SS = 0 Q = 110	Gross requirements
	Scheduled receipts
	Projected available balance
	Net requirements
	Planned order receipts
	Planned order releases
Item F OH = 0 LT = 2 SS = 0 Q = 90	Gross requirements
	Scheduled receipts
	Projected available balance
	Net requirements
	Planned order receipts
	Planned order releases

Answer 1

MRP

I have left cells blank for better visibility and understanding

• Net requirements = gross requirements-(scheduled receipts + projected on hand)         
• Projected on hand of current period, t =(scheduled receipt of t-1 +projected on hand or t-1 + planned order receipt of t-1) -gross requirements of t-1                                                          
• Planned order receipt= net requirements (for LFL ) or multiples of fixed lot size above net requirements
• Planned order release =planned order receipt
• Planned order release time= receipt time - lead time

                                                                                                                                   

For A

Week 1

• Net requirements = `10-(0 + 10)           =0

Since there is not net requirement, , there is no planned order receipt and Planned order release

Week 6

• Gross requirement =60
• Projected on hand of current period, t =0       
• Net requirements = 60-(0 + 0) =60                             
• Planned order receipt= net requirements (for LFL ) = 60
• Planned order release =60
• Planned order release time= receipt time - lead time =6-1 week =5 ^th week

Week 8

• Gross requirement =40
• Projected on hand of current period, t =0
• Net requirements = 40-(0 + 0) =40                             
• Planned order receipt= net requirements (for LFL ) = 40
• Planned order release =40
• Planned order release time= receipt time - lead time =8-1 week =7 ^th week

For B

Week 1

To start production of 20 units of A in week 1 , we need 2*20-40 units of B in Week 1

• Gross requirement = 40
• Projected on hand of current period, t =0
• Net requirements = `40-(30 + 6 0)        = - 50

When the net requirement is zero or negative, this means there is no net requirements

When the net requirement is negative, this means there is excess inventory and this is transferred as projected on hand / projected available balance for next period (week 2)

Hence net requirements = 0,

• Planned order receipt= net requirements (for LFL ) = 60
• Planned order release =60
• Planned order release time= receipt time - lead time for B =48-1 week =47 ^th week

Week 5

• Gross requirement =2*60=120
• Projected on hand of current period, t =(0+50 +0)-0=50
• Net requirements = 120-(0 + 50)          =70                             
• Planned order receipt= net requirements (for LFL ) = 50
• Planned order release =50
• Planned order release time= receipt time - lead time =5-1 week =4 ^th week

Week 7

• Gross requirement =2*40=80
• Projected on hand of current period, t =0
• Net requirements = 80-(0 +0)   =80                             
• Planned order receipt= net requirements (for LFL ) = 80
• Planned order release =80
• Planned order release time= receipt time - lead time =7-1 week =6 ^th week

Similarly we find for c

For D

Week 4

• Gross requirement =180
• Projected on hand of current period, t =(250   
• Net requirements = 180-(0 +25)=155   

• Planned order receipt= multiples of fixed lot size that can meet net requirements = 3 lots* 60=180

We need at least 3 lots to satisfy net requirements

• Planned order release =180
• Planned order release time= receipt time - lead time =4-2 week =2^th week

Week 4

• Gross requirement =120
• Projected on hand of current period, t =25      
• Net requirements = 180-(0 +25)=95    

• Planned order receipt= multiples of fixed lot size that can meet net requirements = 2 lots* 60=180

We need at least 3 lots to satisfy net requirements

• Planned order release =180
• Planned order release time= receipt time - lead time =6-2 week =4^th week

Similarly we continue for E and F. For F we have to meet requirements from both B and C

           

Period	0	1	2	3	4	5	6	7	8
Item A	Gross requirements		10	20				60		40
OH = 10	Scheduled receipts
LT = 1	Projected available balance		10
SS = 0	Net requirements		0	20				60		40
Q = L4L	Planned order receipts		0	20				60		40
	Planned order releases		20				60		40
Item B	Gross requirements		40				120		80
OH = 60	Scheduled receipts		30
LT = 1	Projected available balance		60	50	50	50	50
SS = 0	Net requirements		0				70		80
Q = L4L	Planned order receipts		0				70		80
	Planned order releases		0			70		80
Item C	Gross requirements		60				180		120
OH = 60	Scheduled receipts
LT = 2	Projected available balance		60
SS = 0	Net requirements		0				180		120
Q = L4L	Planned order receipts		0				180		120
	Planned order releases				180		120
Item D	Gross requirements				180		120
OH = 25	Scheduled receipts
LT = 1	Projected available balance	25	25	25	25	25	25	25	25	25
SS = 0	Net requirements				155		95
Q = 60	Planned order receipts				180		120
	Planned order releases			180		120
Item E	Gross requirements				180		120
OH = 0	Scheduled receipts
LT = 2	Projected available balance					40	40	30	30	30
SS = 0	Net requirements				180		80
Q = 110	Planned order receipts				220		110
	Planned order releases		220		110
Item F	Gross requirements				360	70	240	80
OH = 0	Scheduled receipts
LT = 2	Projected available balance						20	50	60	60
SS = 0	Net requirements				360	70	220	30
Q = 90	Planned order receipts				360	90	270	90
	Planned order releases		360	90	270	90