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CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 221
Level: 1
Parent: 20 fan
Quantity: 1X
Item: fan assembly
Lead Time: 3 weeks
Lot Size: L4L
222 CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
Level: 2
Parent: fan assembly
Quantity: 5X
Item: blades
Lead Time: 2 weeks
Lot Size: 100
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 223
(b)
Low-
Lot
1
0
—
—
0
A
Gross requirement
10
for
Scheduled receipt
Lot
Projected on hand
0
Net requirement
10
Planned receipt
10
Planned release
10
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
2
—
—
1
B
Gross requirement
10A
for
Scheduled receipt
Lot
Projected on hand
2
2
2
2
2
2
2
0
Net requirement
8
Planned receipt
8
Planned release
8
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
1
F
Gross requirement
10A
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
5
5
0
Net requirement
5
Planned receipt
5
Planned release
5
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
2
D
Gross requirement
8B
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
5
0
0
Net requirement
3
Planned receipt
3
Planned release
3
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
3
1
—
—
2
G
Gross requirement
5F
for
Scheduled receipt
Lot
Projected on hand
1
1
1
1
1
1
0
0
Net requirement
4
Planned receipt
4
Planned release
4
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
10
—
—
2
H
Gross requirement
5F
for
Scheduled receipt
Lot
Projected on hand
10
10
10
10
10
10
5
5
Net requirement
0
Planned receipt
0
Planned release
0
224 CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.15 (a)
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Ten units are required for production and 10 each of B and F for field service repair:
Component
Quantity
A
10
B
20
CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 225
Copyright ©2014 Pearson Education, Inc.
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
1
F
Gross requirement
10M
10A
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
5
0
0
Net requirement
5
10
Planned receipt
5
10
Planned release
5
10
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
2
D
Gross requirement
8B
10B
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
0
0
0
Net requirement
3
10
Planned receipt
3
10
Planned release
3
10
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
3
1
—
—
2
G
Gross requirement
5F
10F
for
Scheduled receipt
Lot
Projected on hand
1
1
1
1
1
0
0
0
Net requirement
4
10
Planned receipt
4
10
Planned release
4
10
Note: M (in items B and F) means a repair or maintenance item.
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
10
—
—
2
H
Gross requirement
5F
10F
for
Scheduled receipt
Lot
Projected on hand
10
10
10
10
10
5
0
0
Net requirement
5
Planned receipt
5
Planned release
5
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
2
10
—
—
3
C
Gross requirement
13H,B
10B
for
Scheduled receipt
Lot
Projected on hand
10
10
10
10
10
0
0
0
Net requirement
3
10
Planned receipt
3
10
Planned release
3
10
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Lot
1
4
—
—
3
E
Gross requirement
3D
15H,D
for
Scheduled receipt
Lot
Projected on hand
4
4
4
4
1
0
0
0
Net requirement
14
Planned receipt
14
Planned release
14
226 CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.16 (a) Only Item G has changed because it has no subassem-
blies or components.
(b) If week 1 on the production plan is now, then an in-
crease in the lead time for G means only one unit of G
will be available for component F in week 5. There-
CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 227
14.21 (a)
Lot size = Lot-for-lot Setup cost = $200 Holding cost = $10 Lead time = 1 week
1
2
3
4
5
6
7
8
9
Gross requirements
15
20
10
25
Scheduled receipts
On hand (beginning of period)
0
0
0
0
0
0
0
0
0
On hand (end of period)
0
0
0
0
0
0
0
0
0
Net requirements
15
20
10
25
Planned order receipt
15
20
10
25
Planned order release
15
20
10
25
Setups = 4 200 = $800
Holding cost = $10 0 = $0
Total cost = Setup + Holding = 800 + 0 = $800
(b)
Lot size = EOQ Setup cost = $200 Holding cost = $10 Lead time = 1 week
1
2
3
4
5
6
7
8
9
Setups: 5 150 = $750
Holding cost = (allowing for 12 time periods) = 2.50 170 = $425
Total cost = Setup + Holding = 750 + 425 = $1,175
Note: We are counting (and costing) inventory at the end the period (i.e., there are 10 units in inventory at the end of period 1
and 80 at the end of period 9).
14.20 Lot-for-lot can be considered best as it has the lowest cost, at $1,100. EOQ = $1,660; POQ = $1,175.
14.19
Lot size = POQ
Setup cost = $150
Holding cost = $2.50
Lead time = 1 week
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
30
40
30
70
20
10
80
50
Scheduled receipt
On hand (beginning)
40
40
10
0
0
0
70
0
0
0
80
0
0
On hand (end of period)
10
10
0
0
70
0
0
0
80
0
0
0
Net requirements
30
30
20
50
Planned order receipt
30
100
20
90
50
Planned order release
30
100
20
90
50
228 CHAPTER 14 MAT E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.22
(a)
Setups = 6 200 = $1,200
Holding cost = $10 0 = $0
Total cost = Setup + Holding = 1,200 + 0 = $1,200
(b)
Lot size = POQ Setup cost = $200 Holding cost = $10 Lead time = 1 week
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirements
35
40
10
25
10
45
Scheduled receipts
On hand (beginning of period)
0
0
0
0
0
0
0
0
0
10
0
0
On hand (end of period)
0
0
0
0
0
0
0
0
10
0
0
0
Net requirements
35
40
10
25
45
Planned order receipt
35
40
10
35
45
Copyright ©2014 Pearson Education, Inc.
230 CHAPTER 14 MAT E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.25 (a)
222 CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
Level: 2
Parent: fan assembly
Quantity: 5X
Item: blades
Lead Time: 2 weeks
Lot Size: 100
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 223
(b)
Low-
Lot
1
0
—
—
0
A
Gross requirement
10
for
Scheduled receipt
Lot
Projected on hand
0
Net requirement
10
Planned receipt
10
Planned release
10
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
2
—
—
1
B
Gross requirement
10A
for
Scheduled receipt
Lot
Projected on hand
2
2
2
2
2
2
2
0
Net requirement
8
Planned receipt
8
Planned release
8
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
1
F
Gross requirement
10A
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
5
5
0
Net requirement
5
Planned receipt
5
Planned release
5
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
2
D
Gross requirement
8B
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
5
0
0
Net requirement
3
Planned receipt
3
Planned release
3
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
3
1
—
—
2
G
Gross requirement
5F
for
Scheduled receipt
Lot
Projected on hand
1
1
1
1
1
1
0
0
Net requirement
4
Planned receipt
4
Planned release
4
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
10
—
—
2
H
Gross requirement
5F
for
Scheduled receipt
Lot
Projected on hand
10
10
10
10
10
10
5
5
Net requirement
0
Planned receipt
0
Planned release
0
224 CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.15 (a)
Low-
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Ten units are required for production and 10 each of B and F for field service repair:
Component
Quantity
A
10
B
20
CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 225
Copyright ©2014 Pearson Education, Inc.
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
1
F
Gross requirement
10M
10A
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
5
0
0
Net requirement
5
10
Planned receipt
5
10
Planned release
5
10
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
5
—
—
2
D
Gross requirement
8B
10B
for
Scheduled receipt
Lot
Projected on hand
5
5
5
5
5
0
0
0
Net requirement
3
10
Planned receipt
3
10
Planned release
3
10
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
3
1
—
—
2
G
Gross requirement
5F
10F
for
Scheduled receipt
Lot
Projected on hand
1
1
1
1
1
0
0
0
Net requirement
4
10
Planned receipt
4
10
Planned release
4
10
Note: M (in items B and F) means a repair or maintenance item.
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
1
10
—
—
2
H
Gross requirement
5F
10F
for
Scheduled receipt
Lot
Projected on hand
10
10
10
10
10
5
0
0
Net requirement
5
Planned receipt
5
Planned release
5
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
2
10
—
—
3
C
Gross requirement
13H,B
10B
for
Scheduled receipt
Lot
Projected on hand
10
10
10
10
10
0
0
0
Net requirement
3
10
Planned receipt
3
10
Planned release
3
10
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Lot
1
4
—
—
3
E
Gross requirement
3D
15H,D
for
Scheduled receipt
Lot
Projected on hand
4
4
4
4
1
0
0
0
Net requirement
14
Planned receipt
14
Planned release
14
226 CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.16 (a) Only Item G has changed because it has no subassem-
blies or components.
(b) If week 1 on the production plan is now, then an in-
crease in the lead time for G means only one unit of G
will be available for component F in week 5. There-
CHAPTER 14 MA T E R I A L RE Q U I R E M E N T S PL A N N I N G ( M RP) AND E RP 227
14.21 (a)
Lot size = Lot-for-lot Setup cost = $200 Holding cost = $10 Lead time = 1 week
1
2
3
4
5
6
7
8
9
Gross requirements
15
20
10
25
Scheduled receipts
On hand (beginning of period)
0
0
0
0
0
0
0
0
0
On hand (end of period)
0
0
0
0
0
0
0
0
0
Net requirements
15
20
10
25
Planned order receipt
15
20
10
25
Planned order release
15
20
10
25
Setups = 4 200 = $800
Holding cost = $10 0 = $0
Total cost = Setup + Holding = 800 + 0 = $800
(b)
Lot size = EOQ Setup cost = $200 Holding cost = $10 Lead time = 1 week
1
2
3
4
5
6
7
8
9
Setups: 5 150 = $750
Holding cost = (allowing for 12 time periods) = 2.50 170 = $425
Total cost = Setup + Holding = 750 + 425 = $1,175
Note: We are counting (and costing) inventory at the end the period (i.e., there are 10 units in inventory at the end of period 1
and 80 at the end of period 9).
14.20 Lot-for-lot can be considered best as it has the lowest cost, at $1,100. EOQ = $1,660; POQ = $1,175.
14.19
Lot size = POQ
Setup cost = $150
Holding cost = $2.50
Lead time = 1 week
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
30
40
30
70
20
10
80
50
Scheduled receipt
On hand (beginning)
40
40
10
0
0
0
70
0
0
0
80
0
0
On hand (end of period)
10
10
0
0
70
0
0
0
80
0
0
0
Net requirements
30
30
20
50
Planned order receipt
30
100
20
90
50
Planned order release
30
100
20
90
50
228 CHAPTER 14 MAT E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.22
(a)
Setups = 6 200 = $1,200
Holding cost = $10 0 = $0
Total cost = Setup + Holding = 1,200 + 0 = $1,200
(b)
Lot size = POQ Setup cost = $200 Holding cost = $10 Lead time = 1 week
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirements
35
40
10
25
10
45
Scheduled receipts
On hand (beginning of period)
0
0
0
0
0
0
0
0
0
10
0
0
On hand (end of period)
0
0
0
0
0
0
0
0
10
0
0
0
Net requirements
35
40
10
25
45
Planned order receipt
35
40
10
35
45
Copyright ©2014 Pearson Education, Inc.
230 CHAPTER 14 MAT E R I A L RE Q U I R E M E N T S PL A N N I N G (M RP) AND E RP
14.25 (a)
