Chapter 12, Problem 12P

A firm that produces electric golf carts has just received an order for 200 carts, which must be ready for delivery at the start of week 8. Information concerning the product structure, lead times, and quantities on hand is shown in the following table. Use this information to do each of the following:

a. Construct a product tree.

b. Construct an assembly time chart.

c. Develop a material requirements plan that will provide 200 golf carts by week 8 assuming lot-for-lot ordering.

Summary Introduction

To construct: A product tree

Introduction: Materials Requirement Planning (MRP) is the planning or scheduling system, which can be used in the manufacturing process. It is used to plan the number of items required to produce one unit of finished goods (end item).

Explanation of Solution

Given information:

Construct a product tree:

Summary Introduction

To construct: An assembly time chart

Introduction: Materials Requirement Planning (MRP) is the planning or scheduling system, which can be used in the manufacturing process. It is used to plan the number of items required to produce one unit of finished goods (end item).

Explanation of Solution

Given information:

Construct an assembly time chart:

Summary Introduction

To prepare: Materials Requirement planning using the provided information.

Introduction: Materials Requirement Planning (MRP) is the planning or scheduling system, which can be used in the manufacturing process. It is used to plan the number of items required to produce one unit of finished goods (end item).

Explanation of Solution

Given information:

The company needs to provide 200 golf carts by week 8.

Develop a material requirement planning for golf cart:

• It is given that the company needs to provide 200 golf carts by week 8.
• Beginning inventory is 0 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 200 units in week 8 (200-0).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 200 units in the beginning of Week 8. Hence, they need to order for 200 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 7.

Develop a material requirement planning for top:

• Golf cart is the parent for top. Hence, the planned order release of the golf cart would be the gross requirement of the top. As number of units required is 1 for top, the planned order release row of golf cart should be multiplied with 1 to attain the gross requirement column of top.
• Beginning inventory is 40 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 160 units in week 7 (200-40).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 160 units in the beginning of Week 7. Hence, they need to order for 160 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 6.
• Projected on hand inventory for week 8 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 8}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(40+160-200\right)+0\\ =0\end{array}$

Develop a material requirement planning for supports (4):

• Top is the parent for supports. Hence, the planned order release of the top would be the gross requirement of the supports. As number of units required is 4 for supports, the planned order release row of top should be multiplied with 4 to attain the gross requirement column of support.
• Beginning inventory is 200 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 440 units in week 6 (640-200).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 440 units in the beginning of Week 6. Hence, they need to order for 440 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 5.
• Projected on hand inventory for week 7 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week7}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(200+440-640\right)+0\\ =0\end{array}$

Develop a material requirement planning for cover:

• Top is the parent for cover. Hence, the planned order release of the top would be the gross requirement of the cover. As number of units required is 1 for cover, the planned order release row of top should be multiplied with 1 to attain the gross requirement column of cover.
• Beginning inventory is 0 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 160 units in week 6 (160-0).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 160 units in the beginning of Week 6. Hence, they need to order for 160 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 5.

Develop a material requirement planning for base:

• Golf cart is the parent for base. Hence, the planned order release of the golf cart would be the gross requirement of the base. As number of units required is 1 for base, the planned order release row of golf cart should be multiplied with 1 to attain the gross requirement column of base.
• Beginning inventory is 20 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 180 units in week 7 (200-20).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 180 units in the beginning of Week 7. Hence, they need to order for 180 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 6.
• Projected on hand inventory for week 8 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 8}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(20+180-200\right)+0\\ =0\end{array}$

Develop a material requirement planning for motor:

• Base is the parent for motor. Hence, the planned order release of the base would be the gross requirement of the motor. As number of units required is 1 for motor, the planned order release row of base should be multiplied with 1 to attain the gross requirement column of motor.
• Beginning inventory is 300 units.
• Gross requirement for week 6 is 180 units. As the beginning inventory is sufficient to satisfy the demand, there is no necessary to place an order.
• Projected on hand inventory for week 7 is 120 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 7}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(300+0-180\right)+0\\ =120\end{array}$

Develop a material requirement planning for body:

• Base is the parent for body. Hence, the planned order release of the base would be the gross requirement of the body. As number of units required is 1 for body, the planned order release row of base should be multiplied with 1 to attain the gross requirement column of body.
• Beginning inventory is 50 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 130 units in week 6 (180-50).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 3 weeks. Company requires 130 units in the beginning of Week 6. Hence, they need to order for 130 units (as the lot size is lot-for-lot) before three weeks (as the lead-time is 3 weeks). Thus, company need to order the required units in week 3.
• Projected on hand inventory for week 7 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 7}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(50+130-180\right)+0\\ =0\end{array}$

Develop a material requirement planning for seats (2):

• Base is the parent for seats. Hence, the planned order release of the base would be the gross requirement of the seats. As number of units required is 1 for seats, the planned order release row of base should be multiplied with 1 to attain the gross requirement column of seats.
• Beginning inventory is 120 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 240 units in week 6 (360-120).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 2 weeks. Company requires 240 units in the beginning of Week 6. Hence, they need to order for 240 units (as the lot size is lot-for-lot) before two weeks (as the lead-time is 2 weeks). Thus, company need to order the required units in week 4.
• Projected on hand inventory for week 7 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 7}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(120+240-360\right)+0\\ =0\end{array}$

Develop a material requirement planning for frame:

• Body is the parent for frame. Hence, the planned order release of the body would be the gross requirement of the frame. As number of units required is 1 for frame, the planned order release row of body should be multiplied with 1 to attain the gross requirement column of frame.
• Beginning inventory is 35 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 95 units in week 3 (130-35).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 95 units in the beginning of Week 3. Hence, they need to order for 95 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 2.
• Projected on hand inventory for week 4 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 4}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(35+95-130\right)+0\\ =0\end{array}$

Develop a material requirement planning for controls:

• Body is the parent for controls. Hence, the planned order release of the body would be the gross requirement of the controls. As number of units required is 1 for controls, the planned order release row of body should be multiplied with 1 to attain the gross requirement column of controls.
• Beginning inventory is 0 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 130 units in week 3 (130-0).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 130 units in the beginning of Week 3. Hence, they need to order for 130 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 2.

Develop a material requirement planning for wheel assemblies (4):

• Body is the parent for wheel assemblies. Hence, the planned order release of the body would be the gross requirement of the wheel assemblies. As number of units required is 4 for wheel assemblies, the planned order release row of body should be multiplied with 4 to attain the gross requirement column of wheel assemblies.
• Beginning inventory is 240 units.
• Net requirement can be calculated by subtracting the projected on-hand from the gross requirement. Hence, the net requirement is 280 units in week 3 (520-240).
• Planned order release is the order given by the company and planned order receipts is the order received by the firm.
• Lead-time is given as 1 week. Company requires 280 units in the beginning of Week 3. Hence, they need to order for 280 units (as the lot size is lot-for-lot) on previous week (as the lead-time is 1 week). Thus, company need to order the required units in week 2.
• Projected on hand inventory for week 4 is 0 units. Calculation is as follows:

$\begin{array}{c}\text{Projected on hand for Week 4}=\left\{\begin{array}{l}\left(\begin{array}{l}\text{Projected on-hand}+\text{Planned order receipt}\\ -\text{Gross requirement}\end{array}\right)+\\ \text{Scheduled receipt}\end{array}\right\}\\ =\left(240+280-520\right)+0\\ =0\end{array}$