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
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
900
Scheduled receipt
On hand 150
150
Net requirement
750
Planned order receipt
750
Planned order release
Level: 1
Quantity: 1X
Item: electrical unit
Lot Size: L4L
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
900
Scheduled receipt
On hand
Net requirement
900
Planned order receipt
900
Planned order release
Level: 2
Quantity: 1X
Item: frame
Lead Time: 2 weeks
Lot Size: L4L
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
800
Scheduled receipt
On hand
Net requirement
800
Planned order receipt
800
Planned order release
Level: 2
Quantity: 2X
Item: supports
Lead Time: 1 week
Lot Size: 100
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
1,600
Scheduled receipt
On hand
Net requirement
1,550
Planned order receipt
1,600
Planned order release
1,600
Level: 2
Quantity: 1X
Item: handle
Lot Size: 500
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
800
Scheduled receipt
On hand
400
100
Net requirement
400
Planned order receipt
500
Planned order release
Level: 2
Quantity: 1X
Item: hub
Lot Size: L4L
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Gross requirement
750
Scheduled receipt
On hand
Net requirement
Planned order receipt
750
Level: 1
Parent: 20 fan
Quantity: 1X
Item: fan assembly
Lead Time: 3 weeks
Lot Size: L4L
Copyright ©2014 Pearson Education, Inc.
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
Quantity: 1X
Item: motor
Lot Size: L4L
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Level: 2
Quantity: 1X
Item: switch
Lot Size: 12
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Level: 2
Quantity: 1X
Item: knob
Lot Size: 25
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Level: 2
Quantity: 1X
Item: motor
Lot Size: L4L
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Level: 2
Quantity: 1X
Item: switch
Lot Size: 12
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Level: 2
Quantity: 1X
Item: knob
Lot Size: 25
Week No.
1
2
3
4
5
6
7
8
9
10
11
12
Level: 2
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)
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
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
Gross requirement
Scheduled receipt
Projected on hand
Net requirement
Planned receipt
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Scheduled receipt
Projected on hand
Net requirement
Gross requirement
Scheduled receipt
Projected on hand
Net requirement
Planned receipt
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Scheduled receipt
Projected on hand
Net requirement
14.15 (a)
C
40
D
20
E
40
F
20
G
20
H
20
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Gross requirement
Scheduled receipt
Projected on hand
Net requirement
Planned receipt
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Gross requirement
Scheduled receipt
Net requirement
Planned receipt
C
40
D
20
E
40
F
20
G
20
H
20
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Gross requirement
Scheduled receipt
Projected on hand
Net requirement
Planned receipt
Low–
Lot
Lead
On
Safety
Level
Item
Period (week)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Gross requirement
Scheduled receipt
Net requirement
Planned receipt
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)
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
Size
Time
Hand
Stock
Allocated
Code
ID
1
2
3
4
5
6
7
8
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
Gross requirements
15
20
10
Scheduled receipts
On hand (beginning of period)
0
0
3
3
0
0
9
9
9
On hand (end of period)
0
3
3
1
1
9
9
9
2
Net requirements
15
20
9
Planned order receipt
18
18
18
Planned order release
18
18
18
18
1
2
3
4
5
6
7
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
25
Gross requirements
15
20
10
Scheduled receipts
On hand (beginning of period)
0
0
3
3
0
0
9
9
9
On hand (end of period)
0
3
3
1
1
9
9
9
2
Net requirements
15
20
9
Planned order receipt
18
18
18
Planned order release
18
18
18
18
1
2
3
4
5
6
7
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
25
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
1
2
3
4
5
6
7
9
10
11
12
Gross requirements
40
10
25
10
Scheduled receipts
On hand (beginning of period)
0
0
0
0
0
0
0
0
0
0
On hand (end of period)
0
0
0
0
0
0
0
0
0
0
Net requirements
40
10
25
10
Planned order release
40
10
10
45
1
2
3
4
5
6
7
9
10
11
12
Gross requirements
40
10
25
10
Scheduled receipts
On hand (beginning of period)
0
0
0
0
0
0
0
0
0
0
On hand (end of period)
0
0
0
0
0
0
0
0
0
0
Net requirements
40
10
25
10
Planned order release
40
10
10
45
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
Planned order release
10
35
1
2
4
5
6
7
8
9
10
12
Gross requirements
35
10
25
Scheduled receipts
On hand (beginning of period)
0
0
17
17
7
7
7
5
On hand (end of period)
0
11
17
7
7
7
5
Net requirements
35
0
18
Planned order receipt
46
0
23
Planned order release
23
23
Planned order release
10
35
1
2
4
5
6
7
8
9
10
12
Gross requirements
35
10
25
Scheduled receipts
On hand (beginning of period)
0
0
17
17
7
7
7
5
On hand (end of period)
0
11
17
7
7
7
5
Net requirements
35
0
18
Planned order receipt
46
0
23
Planned order release
23
23
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
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)