Question

The following table lists the components needed to assemble an end item, lead times (in weeks), and quantities on hand.

Item		Lead Time	Amount on Hand			Direct Components
End		3		0		L(2), C(1), K(3)
L		3		12		B(2), J(3)
C		4		16		G(2), B(2)
K		4		21		H(4), B(2)
B		3		26
J		4		33
G		4		4
H		3		0

a. If 43 units of the end item are to be assembled, how many additional units of B are needed? (Hint: You don’t need to develop an MRP plan.)

Additional units            

Answer 1

Answer: 434

Gross Requirement = Total no. units required (irrespective to On hand Inventory)

Net Requirement = Gross Requirement - Amount On Hand

Item B is required for Item L,C and K,

So, to derive the no. of additional unit of B, first we need to find the Gross Requirement of B, which is depend on the Net Requirement of L,C and K

Now Gross Requirement of L,C and K is depend on the end item, because they are direct components to End Item.

Gross Requirement of L = 2* Units of End item to be assembled = 2*43 = 86

Net Requirement of L = Gross Requirement of L - Amount On Hand of L = 86 - 12 =74

Gross Requirement of C = 1* Units of End item to be assembled = 1*43 = 43

Net Requirement of C = Gross Requirement of C- Amount On Hand of C= 43 - 16 =27

Gross Requirement of K = 3* Units of End item to be assembled = 3*43 = 129

Net Requirement of K= Gross Requirement of K- Amount On Hand of K= 129 - 21 = 108

Gross Requirement of B = 2*Net Requirement of L + 2*Net Requirement of C + 2*Net Requirement of K = 2*74 + 2*27 + 2*129 = 148 + 54 + 258 = 460

Net Requirement of B = Gross Requirement of B - Amount on Hand of B = 460 - 26 =434

So, additional 434 units of B are needed.