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a)
To develop: A gross requirements plan for all the items.
Introduction:
Gross requirements plan:
The gross requirements plan is the plan where the independent and dependent demand for a product or a component before the on-hand inventory and the scheduled receipts are netted with.
a)
Explanation of Solution
Given information:
Product structure:
Master production
| MPS for X1 | ||||||
| Period | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 50 | 20 | 100 | |||
Inventory and lead time:
| Item | X1 | B1 | B2 | A1 | C | D | E |
| Lead time | 1 | 2 | 2 | 1 | 1 | 1 | 3 |
| On hand | 50 | 20 | 20 | 5 | 0 | 0 | 10 |
Item X1:
| Week | ||||||||||||
| Item X1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 50 | 20 | 100 | |||||||||
| Order release | 50 | 20 | 100 | |||||||||
The gross requirements are 50, 20 and 100 (1 assembly of X1) in weeks 8, 10 and 12 respectively derived from the master production schedule of X1. The lead time is 1 week. Therefore, the order release will be 50, 20 and 100 in weeks 7, 9 and 11 respectively.
Item B1:
| Week | ||||||||||||
| Item B1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 50 | 20 | 100 | |||||||||
| Order release | 50 | 20 | 100 | |||||||||
The order release of X1 will become the gross requirements of B1. The gross requirements are 50, 20 and 100 (1 assembly of B1) in weeks 7, 9 and 11 respectively. The lead time is 2 weeks. Therefore, the order release will be 50, 20 and 100 in weeks 5, 7 and 9 respectively.
Item B2:
| Week | ||||||||||||
| Item B2 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 100 | 40 | 200 | |||||||||
| Order release | 100 | 40 | 200 | |||||||||
The order release of X1 will become the gross requirements of B2. The gross requirements are 100, 40 and 200 (2 assemblies of B2) in weeks 7, 9 and 11 respectively. The lead time is 2 weeks. Therefore, the order release will be 100, 40 and 200 in weeks 5, 7 and 9 respectively.
Item A1:
| Week | ||||||||||||
| Item A1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 50 | 20 | 100 | |||||||||
| Order release | 50 | 20 | 100 | |||||||||
The order release of B1 will become the gross requirements of A1. The gross requirements are 50, 20 and 100 (1 assembly of A1) in weeks 5, 7 and 9 respectively. The lead time is 1 week. Therefore, the order release will be 50, 20 and 100 in weeks 4, 6 and 8 respectively.
Item C:
| Week | ||||||||||||
| Item C | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 200 | 80 | 400 | |||||||||
| Order release | 200 | 80 | 400 | |||||||||
The order release of B2 will become the gross requirements of C. The gross requirements are 200, 80 and 400 (2 assemblies of C) in weeks 5, 7 and 9 respectively. The lead time is 1 week. Therefore, the order release will be 200, 80 and 400 in weeks 4, 6 and 8 respectively.
Item D:
| Week | ||||||||||||
| Item D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 100 | 40 | 200 | |||||||||
| Order release | 100 | 40 | 200 | |||||||||
The order release of B2 will become the gross requirements of D. The gross requirements are 100, 40 and 200 (2 assemblies of C) in weeks 5, 7 and 9 respectively. The lead time is 1 week. Therefore, the order release will be 100, 40 and 200 in weeks 4, 6 and 8 respectively.
Item E:
| Week | ||||||||||||
| Item E | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 200 | 50 | 80 | 20 | 400 | 100 | ||||||
| Order release | 200 | 50 | 80 | 20 | 400 | 100 | ||||||
The order release of B1 and D will become the gross requirements of E. The gross requirements are 50, 20 and 100 (1 assembly of E) in weeks 5, 7 and 9 respectively. The lead time is 3 weeks. Therefore, the order release will be 50, 20 and 100 in weeks 2, 4 and 6 respectively.
The gross requirements are 200, 80 and 400 (2 assembly of E) in weeks 4, 6 and 8 respectively. The lead time is 3 weeks. Therefore, the order release will be 200, 80 and 400 in weeks 1, 3 and 5 respectively.
b)
To develop: A net requirements plan for all the items.
Introduction:
Net requirements plan:
The net requirements plan is the plan which is established on the gross requirements plan formed by deducting the stock on and the scheduled receipts. If the total requirement is below the safety stock levels, a planned order is made based on the given lot sizing technique.
b)
Explanation of Solution
Given information:
Product structure:
Master production schedule for X1:
| MPS for X1 | ||||||
| Period | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 50 | 20 | 100 | |||
Inventory and lead time:
| Item | X1 | B1 | B2 | A1 | C | D | E |
| Lead time | 1 | 2 | 2 | 1 | 1 | 1 | 3 |
| On hand | 50 | 20 | 20 | 5 | 0 | 0 | 10 |
Item X1:
| Week | ||||||||||||
| Item X1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 50 | 20 | 100 | |||||||||
| Scheduled receipt | ||||||||||||
| On hand (50) | 50 | 0 | 0 | |||||||||
| Net requirement | 0 | 20 | 100 | |||||||||
| Planned order receipt | 20 | 100 | ||||||||||
| Planned order release | 20 | 100 | ||||||||||
Week 8:
The gross requirement is 50 (1 assembly)derived from the master production schedule of X1. The on hand inventory is 50. Hence, the net requirement is 0. The lead time is 1 week. Therefore, there will be no planned order release.
Week 10:
The gross requirement is 20 (1 assembly) derived from the master production schedule of X1. The on hand inventory is 0. Hence, the net requirement is 20. The lead time is 1 week. Therefore, the planned order release will be 20 in week 9 which will be the planned order receipt in week 10.
Week 12:
The gross requirement is 100 (1 assembly) derived from the master production schedule of X1. The on hand inventory is 0. Hence, the net requirement is 100. The lead time is 1 week. Therefore, the planned order release will be 100 in week 11 which will be the planned order receipt in week 12.
Item B1:
| Week | ||||||||||||
| Item B1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 20 | 100 | ||||||||||
| Scheduled receipt | ||||||||||||
| On hand (20) | 20 | 0 | ||||||||||
| Net requirement | 0 | 100 | ||||||||||
| Planned order receipt | 100 | |||||||||||
| Planned order release | 100 | |||||||||||
Week 9:
The gross requirement is 20 (1 assembly) derived from the planned order release of X1. The on hand inventory is 20. Hence, the net requirement is 0. The lead time is 2 weeks. Therefore, there will be no planned order release.
Week 11:
The gross requirement is 100 (1 assembly) derived from planned order release of X1. The on hand inventory is 0. Hence, the net requirement is 100. The lead time is 2 weeks. Therefore, the planned order release will be 100 in week 9 which will be the planned order receipt in week 11.
Item B2:
| Week | ||||||||||||
| Item B2 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 40 | 200 | ||||||||||
| Scheduled receipt | ||||||||||||
| On hand (20) | 20 | 0 | ||||||||||
| Net requirement | 20 | 200 | ||||||||||
| Planned order receipt | 20 | 200 | ||||||||||
| Planned order release | 20 | 200 | ||||||||||
Week 9:
The gross requirement is 40 (2 assembly) derived from the planned order release of X1. The on hand inventory is 20. Hence, the net requirement is 20. The lead time is 2 weeks. Therefore, the planned order release will be 20 in week 7 which will be the planned order receipt in week 9.
Week 11:
The gross requirement is 200 (2 assembly) derived from planned order release of X1. The on hand inventory is 0. Hence, the net requirement is 200. The lead time is 2 weeks. Therefore, the planned order release will be 200 in week 9 which will be the planned order receipt in week 11.
Item A1:
| Week | ||||||||||||
| Item A1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 100 | |||||||||||
| Scheduled receipt | ||||||||||||
| On hand (5) | 5 | |||||||||||
| Net requirement | 95 | |||||||||||
| Planned order receipt | 95 | |||||||||||
| Planned order release | 95 | |||||||||||
Week 9:
The gross requirement is 100 (1 assembly) derived from the planned order release of B1. The on hand inventory is 5. Hence, the net requirement is 95. The lead time is 1 week. Therefore, the planned order release will be 95 in week 8 which will be the planned order receipt in week 9.
Item C:
| Week | ||||||||||||
| Item C | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 40 | 400 | ||||||||||
| Scheduled receipt | ||||||||||||
| On hand (0) | 0 | 0 | ||||||||||
| Net requirement | 40 | 400 | ||||||||||
| Planned order receipt | 40 | 400 | ||||||||||
| Planned order release | 40 | 400 | ||||||||||
Week 7:
The gross requirement is 40 (2 assembly) derived from the planned order release of B2. The on hand inventory is 0. Hence, the net requirement is 40. The lead time is 1 week. Therefore, the planned order release will be 40 in week 6 which will be the planned order receipt in week 7.
Week 9:
The gross requirement is 400 (2 assembly) derived from planned order release of B2. The on hand inventory is 0. Hence, the net requirement is 400. The lead time is 1 week. Therefore, the planned order release will be 400 in week 8 which will be the planned order receipt in week 9.
Item D:
| Week | ||||||||||||
| Item D | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 20 | 200 | ||||||||||
| Scheduled receipt | ||||||||||||
| On hand (0) | 0 | 0 | ||||||||||
| Net requirement | 20 | 200 | ||||||||||
| Planned order receipt | 20 | 200 | ||||||||||
| Planned order release | 20 | 200 | ||||||||||
Week 7:
The gross requirement is 20 (1 assembly) derived from the planned order release of B2. The on hand inventory is 0. Hence, the net requirement is 20. The lead time is 1 week. Therefore, the planned order release will be 20 in week 6 which will be the planned order receipt in week 7.
Week 9:
The gross requirement is 200 (1 assembly) derived from planned order release of B2. The on hand inventory is 0. Hence, the net requirement is 200. The lead time is 1 week. Therefore, the planned order release will be 200 in week 8 which will be the planned order receipt in week 9.
Item E:
| Week | ||||||||||||
| Item E | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Gross requirements | 40 | 400 | 100 | |||||||||
| Scheduled receipt | ||||||||||||
| On hand (10) | 10 | 0 | 0 | |||||||||
| Net requirement | 30 | 400 | 100 | |||||||||
| Planned order receipt | ||||||||||||
| Planned order release | 30 | 400 | 100 | |||||||||
Week 6:
The gross requirement is 40 (2 assembly) derived from the planned order release of B2. The on hand inventory is 10. Hence, the net requirement is 30. The lead time is 3 weeks. Therefore, the planned order release will be 30 in week 3 which will be the planned order receipt in week 6.
Week 8:
The gross requirement is 400 (2 assembly) derived from the planned order release of B2. The on hand inventory is 0. Hence, the net requirement is 400. The lead time is 3 weeks. Therefore, the planned order release will be 400 in week 5 which will be the planned order receipt in week 8.
Week 9:
The gross requirement is 100 (1 assembly) derived from the master production schedule of B1. The on hand inventory is 0. Hence, the net requirement is 100. The lead time is 3 weeks. Therefore, the planned order release will be 100 in week 6 which will be the planned order receipt in week 9.
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