Discussion Questions
1. Calculate economic order quantities for each of the three types of toys. The EOQ
formula is recommended from the supplement to Chapter 15 that considers uniform lot
delivery of toys.
2. Prepare a master production schedule for the next 6 weeks using the EOQ’s calculated in
Question 1 and a work force of 10 employees. What inventory turnover ratio is achieved
by this master schedule? How does this turnover compare with past levels and with
management’s goals?
3. Prepare a parts explosion to support the master schedule. What parts should be ordered
each week?
4. What should Andrea Meline do in order to meet the inventory and service goals stated
by management?
5. How should Andrea deal with the organization issues presented in this case?
ToysPlus is a small company in the toy industry. They control the manufacturing of toys by
using an MRP System. Management wants to improve service levels and inventory turns
by doing a better job of planning and scheduling production. The case provides data on
three toys which are manufactured including the forecasts, costs, bill of materials, and
planning factors for these toys.
The purpose of this case is to illustrate the principles of scheduling with an MRP system. A
spreadsheet is provided on the CD-ROM which accompanies the text to provide the MRP
logic. The student inputs forecasts, costs and a master schedule. The spreadsheet then
performs detailed parts explosions. The student must analyze the resulting schedules and
re-plan until an acceptable MRP plan is obtained. Some organizational issues are also
presented in the case, which are encountered in using a formal MRP system.
Analysis
The analysis of this case will be described using the Excel Worksheet provided with the
text. This analysis can be done by hand, but it is quite tedious.
The first thing the students should do is to input the forecasts into the worksheet. The
forecasts given in the case can be used directly, as shown in Exhibit 1. There is some
question whether the forecasts coming from marketing are accurate. Andrea Meline
usually adjusts the marketing forecasts, but we have no way of making any adjustments in
this particular situation.
From the forecasts for each of the three toys, the spreadsheet will calculate average weekly
demand. These figures are used for EOQ and runout calculations. The next step is to
calculate the EOQ’s for each of the toys. These are calculated by entering the weekly toy
production rates and the unit costs given in the case, see Exhibit 1.
