Chapter 14, Problem 13P

a)

Summary Introduction

To construct: A product structure.

Introduction:

Product structure:

The product structure is a visual representation of the components needed for a product assembly and the sequence at which they must be developed. It will clearly depict the parents and children components at each level.

Answer to Problem 13P

Product structure:

Explanation of Solution

Given information:

• 1000 20” fans due in week 7.
• Each fan is made of a housing assembly, two grills, fan assembly and an electrical unit.
• Housing assembly is made of frame, two supports, and a handle.
• Fan assembly is made up of a hub and five blades.
• Electrical unit consists of a motor, switch and a knob.

Component	Lead time	On-hand inventory	Lot size	Scheduled receipt
20" Fan	1	100
Housing	1	100
Frame	2
Supports (2)	1	50	100
Handle	1	400	500
Grills (2)	2	200	500
Fan assembly	3	150
Hub	1
Blades (5)	2		100
Electrical unit	1
Motor	1
Switch	1	20	12
Knob	1		25	200 in week 2

Product structure:

The product is a 20” fan. It is made of four components. Each fan is made of a housing assembly, two grills, fan assembly and an electrical unit. Housing assembly is made of frame, two supports, and a handle. Fan assembly is made up of a hub and five blades. Electrical unit consists of a motor, switch and a knob.

b)

Summary Introduction

To construct: A time-phased product structure.

Introduction:

Time-phased product structure:

The time-phased product structure will represent the product visually with the details of when each component must begin production. It should be done to ensure that all the components are on time.

Answer to Problem 13P

Time-phased product structure:

Explanation of Solution

Given information:

• 1000 20” fans due in week 7.
• Each fan is made of a housing assembly, two grills, fan assembly and an electrical unit.
• Housing assembly is made of frame, two supports, and a handle.
• Fan assembly is made up of a hub and five blades.
• Electrical unit consists of a motor, switch and a knob.

Component	Lead time	On-hand inventory	Lot size	Scheduled receipt
20" Fan	1	100
Housing	1	100
Frame	2
Supports (2)	1	50	100
Handle	1	400	500
Grills (2)	2	200	500
Fan assembly	3	150
Hub	1
Blades (5)	2		100
Electrical unit	1
Motor	1
Switch	1	20	12
Knob	1		25	200 in week 2

Time-phased product structure:

The end product is the fan which must be ready at week 7. All the other components must be completed on week 6. The components at the lower level must be completed first before proceeding to the higher levels. Each component at each level is begun depending on the lead time of the product.

The products are started in advance so that they are developed and ready on time so that the dependent parent will be ready to develop its product. The process is repeated until all the subassemblies are ready to make the final product.

c)

Summary Introduction

To develop: A net requirements plan.

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.

Explanation of Solution

Given information:

• 1000 20” fans due in week 7.
• Each fan is made of a housing assembly, two grills, fan assembly and an electrical unit.
• Housing assembly is made of frame, two supports, and a handle.
• Fan assembly is made up of a hub and five blades.
• Electrical unit consists of a motor, switch and a knob.

Component	Lead time	On-hand inventory	Lot size	Scheduled receipt
20" Fan	1	100
Housing	1	100
Frame	2
Supports (2)	1	50	100
Handle	1	400	500
Grills (2)	2	200	500
Fan assembly	3	150
Hub	1
Blades (5)	2		100
Electrical unit	1
Motor	1
Switch	1	20	12
Knob	1		25	200 in week 2

Net requirements plan:

20’’ Fan:

	Week
20" Fan	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements							1,000
Scheduled  receipt
On hand (100)							100
Net requirement							900
Planned order receipt							900
Planned order release						900

Week 7:

The gross requirement is 1,000 (1 assembly). The on hand inventory is 100. Hence, the net requirement is 900. The lead time is 1 week. Therefore, the planned order release will be 900 in week 6 which will be the planned order receipt in week 7.

Housing:

	Week
Housing	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements						900
Scheduled  receipt
On hand (100)						100
Net requirement						800
Planned order receipt						800
Planned order release					800

Week 6:

The gross requirement is 900 (1 assembly) derived from the planned order release of 20” fan. The on hand inventory is 100. Hence, the net requirement is 800. The lead time is 1 week. Therefore, the planned order release will be 800 in week 5 which will be the planned order receipt in week 6.

Grills:

	Week
Grills	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements						1,800
Scheduled  receipt
On hand (200)						200	400
Net requirement						1,600
Planned order receipt						2,000
Planned order release				2,000

Week 6:

The gross requirement is 1,800 (2 assembly) derived from the planned order release of 20” fan. The on hand inventory is 200. Hence, the net requirement is 1,600. The lead time is 2 weeks. Therefore, the planned order release will be 2,000 (Lot Size = 500) in week 4 which will be the planned order receipt in week 6. The excess inventory will be available at week 7.

Fan assembly:

	Week
Fan assembly	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements						900
Scheduled  receipt
On hand (150)						150
Net requirement						750
Planned order receipt						750
Planned order release			750

Week 6:

The gross requirement is 900 (1 assembly) derived from the planned order release of 20” fan. The on hand inventory is 150. Hence, the net requirement is 750. The lead time is 2 weeks. Therefore, the planned order release will be 750 in week 4 which will be the planned order receipt in week 6.

Electrical unit:

Electrical Unit	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements						900
Scheduled  receipt
On hand (0)						0
Net requirement						900
Planned order receipt						900
Planned order release					900

Week 6:

The gross requirement is 900 (1 assembly) derived from the planned order release of 20” fan. The on hand inventory is 0. Hence, the net requirement is 900. The lead time is 1 week. Therefore, the planned order release will be 900 in week 5 which will be the planned order receipt in week 6.

Frame:

Frame	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements					800
Scheduled  receipt
On hand (0)					0
Net requirement					800
Planned order receipt					800
Planned order release			800

Week 5:

The gross requirement is 800 (1 assembly) derived from the planned order release of Housing. The on hand inventory is 0. Hence, the net requirement is 800. The lead time is 2 weeks. Therefore, the planned order release will be 800 in week 3 which will be the planned order receipt in week 5.

Supports:

	Week
Supports	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements					1,600
Scheduled  receipt
On hand (50)					50
Net requirement					1,550
Planned order receipt					1,600
Planned order release				1,600

Week 5:

The gross requirement is 1,600 (2 assembly) derived from the planned order release of Housing. The on hand inventory is 50. Hence, the net requirement is 1,550. The lead time is 1 week. Therefore, the planned order release will be 1,600 (Lot size = 100) in week 4 which will be the planned order receipt in week 5. The excess inventory is available at week 6.

Handle:

	Week
Handle	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements					800
Scheduled  receipt
On hand (400)					400	100
Net requirement					400
Planned order receipt					500
Planned order release				500

Week 5:

The gross requirement is 800 (1 assembly) derived from the planned order release of Housing. The on hand inventory is 400. Hence, the net requirement is 400. The lead time is 1 week. Therefore, the planned order release will be 500 (Lot size = 500) in week 4 which will be the planned order receipt in week 5. The excess inventory is available at week 6.

Hub:

	Week
Hub	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements			750
Scheduled  receipt
On hand (0)			0
Net requirement			750
Planned order receipt			750
Planned order release		750

Week 3:

The gross requirement is 750 (1 assembly) derived from the planned order release of fan assembly. The on hand inventory is 0. Hence, the net requirement is 750. The lead time is 1 week. Therefore, the planned order release will be 750 in week 2 which will be the planned order receipt in week 3.

Blades:

	Week
Blades	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements			3,750
Scheduled  receipt
On hand (0)			0	50
Net requirement			3,750
Planned order receipt			3,800
Planned order release	3,800

Week 3:

The gross requirement is 3,750 (5 assembly) derived from the planned order release of fan assembly. The on hand inventory is 0. Hence, the net requirement is 3,750. The lead time is 2 weeks. Therefore, the planned order release will be 3,800 (Lot size = 100) in week 1 which will be the planned order receipt in week 3. The excess inventory will be available at week 4.

Motor:

	Week
Motor	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements					900
Scheduled  receipt
On hand (0)					0
Net requirement					900
Planned order receipt					900
Planned order release				900

Week 5:

The gross requirement is 900 (1 assembly) derived from the planned order release of Electrical unit. The on hand inventory is 0. Hence, the net requirement is 900. The lead time is 1 week. Therefore, the planned order release will be 900 in week 4 which will be the planned order receipt in week 5.

Switch:

	Week
Switch	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements					900
Scheduled  receipt
On hand (20)					20	8
Net requirement					880
Planned order receipt					888
Planned order release				888

Week 5:

The gross requirement is 900 (1 assembly) derived from the planned order release of Electrical unit. The on hand inventory is 20. Hence, the net requirement is 880. The lead time is 1 week. Therefore, the planned order release will be 888 (Lot Size = 12) in week 4 which will be the planned order receipt in week 5. The excess inventory will be available at week 6.

Knob:

	Week
Knob	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements					900
Scheduled  receipt		200
On hand (0)			200	200	200
Net requirement					700
Planned order receipt					700
Planned order release				700

Week 2:

There is a scheduled receipt of 200 which can be used as inventory.

Week 5:

The gross requirement is 900 (1 assembly) derived from the planned order release of Electrical unit. The on hand inventory is 0. But, there is a scheduled receipt of 200. Hence, the net requirement is 7000. The lead time is 1 week. Therefore, the planned order release will be 700 in week 4 which will be the planned order receipt in week 5.