Production Management

Homework/Assignment 4
Full Name of submitter: Nguyễn Hải Phong Student ID: IELSIU20059

Your Group number is: 5

Title of your Group project is: Aggregate Planning

Contents of questions

Develop MRP matrix

Exercise 1: Product A is made according to the bill of materials diagram shown below.  Fifty
as are needed in week 3, 250 in week 5, and 150 in week 7.  Product A has a lead-time of one
week.

The table below shows additional data (master file) for the items B, C, and D. 

B C D

Lot size L4L 800 L4L

Lead-time 2 1 1

Beginning inventory 0 120 50

Scheduled receipts 100 week 2 300 week 2 none

Exercise 2: 
 Production Management

Product A is made according to the bill of materials diagram shown below; 200 units of A
are needed in week 5; 300 in week 8.  Product A lead-time = 1 week.

The table below shows additional data for the items B, C, D, and E. 

B C D E

Lot size L4L L4L 500 900

Lead-time 2 3 1 2

Beginning inventory 0 0 200 500

Scheduled receipts none none 500 week 2 none

Exercise 3: 

Products A and B are made according to the bill of materials diagram shown
below.  Scheduled quantities of the end products are, for A, 95 units in week 4, 150 units in
week 6, and 130 units in week 8, and for B, 80 units in week 3, 70 units in week 6.  Lead-
times: A = 2 weeks, B = 1 week.
 Production Management

The table below shows additional data for the items C, D, and E. 

C D E

Lot size 250 800 L4L

Lead-time 2 1 3

Beginning inventory 625 350 85

Scheduled receipts none none 200 week 2

 Exercise 4:

There are for 103 units of product A in period 8 and 200 units of product Q in period
7. The on hand inventory levels for each item are A = 18, Q =6, B = 10, C = 20, D = 0
and E = 30. A safety stock of five units is maintained on product A and six on units of
product Q with no safety stock on other components. Additionally, ten units of 18 units
on hand of product A are already allocated to particular customers. There are no open
orders (scheduled receipts) on any item. The lot size for items A, Q, B, and C is the same
as the net requirements (lot-for-lot ordering), while the lot size for D is 200 units and
for E is 500 units.
 Production Management

Develop an MRP for product A and Q with the product structures (BOM) given below.
What should be the size of the orders for each item, and when should orders released?

 Exercise 5:

The Alpha Beta Company produces two products; A and B, that are made from components
C and D. Given the following product structures, master scheduling requirements, and
inventory information, determine when orders should be released for A, B, C, and D and the
size of those orders

Exercise 6:
 Production Management

Files and More, Inc. (F&M), a manufacturer of office equipment, uses MRP to schedule its
production. Because of the current recession and the need to cut costs, F&M has targeted
inventory as a prime area for cost reduction. However, the company does not want to reduce
its customer service level in the process. Demand and inventory data for a two-drawer file
cabinet are given in the following table. Complete an MRP matrix for the file cabinet using:
(a) L4L
(b) EOQ
(c) POQ lot sizing.
Which lot-sizing rule do you recommend?

Lead time = 1 period

Holding cost = $1 per cabinet per period
Ordering cost = $100 per order
Beginning inventory = 25

Note:

- Continue using this form to complete your works and submit on Blackboard
- Name your file
o If you submit individually: Promana_HW4_StudentID_FullName
o If you submit for a group (Group # are as per the number you have registered as
guided in the file “Semester Project Requirement” and be finalized by lecturer):
2122Promana_HW4_G#
- Due Date is defined in detail at each “ ASSIGNMENT INFORMATION” from Blackboard
- Maximum score of late submission is two third of “Point Possible”
- If you can’t submit on Blackboard: Email your work to TA, copy it to your Lecturer, attached
also the screenshot of your Blackboard showing error in that transaction

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Answers/Works
Exercise 1:
Item: A LLC: 0 WEEK
Lot size: L4L LT: 1 1 2 3 4 5 6 7
Gross Requirements 50 250 150
Scheduled Receipts
Projected on Hand 0 0 0 0 0 0 0 0
 Production Management

Net Requirements 50 250 150

Planned Order Receipts 50 250 150
Planned Order Releases 50 250 150

Item: B LLC: 1 WEEK

Lot size: L4L LT: 2 1 2 3 4 5 6 7
Gross Requirements 100 500 300
Scheduled Receipts 100
Projected on Hand 0 0 0 0 0 0 0 0
Net Requirements 500 300
Planned Order Receipts 500 300
Planned Order Releases 500 300

Item: C LLC: 1-2 WEEK

Lot size: 800 LT: 1 1 2 3 4 5 6 7
Gross Requirements 1050 850 150
Scheduled Receipts 300
Projected on Hand 120 120 170 170 120 120 770 770
Net Requirements 630 680 30
Planned Order Receipts 800 800 800
Planned Order Releases 800 800 800

Item: D LLC: 2 WEEK

Lot size: L4L LT: 1 1 2 3 4 5 6 7
Gross Requirements 500 300
Scheduled Receipts
Projected on Hand 50 50 0 0 0 0 0 0
Net Requirements 450 300
Planned Order Receipts 450 300
Planned Order Releases 450 300
 Production Management

Exercise 2:

Item: A LLC: 0 WEEK

Lot size: L4L LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 200 300
Scheduled Receipts
Projected on Hand 0 0 0 0 0 0 0 0 0
Net Requirements 200 300
Planned Order Receipts 200 300
Planned Order Releases 200 300

Item: B LLC: 1 WEEK

Lot size: L4L LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 200 300
Scheduled Receipts
Projected on Hand 0 0 0 0 0 0 0 0 0
Net Requirements 200 300
Planned Order Receipts 200 300
Planned Order Releases 200 300

Item: C LLC: 1 WEEK

Lot size: L4L LT: 3 1 2 3 4 5 6 7 8
Gross Requirements 200 300
Scheduled Receipts
Projected on Hand 0 0 0 0 0 0 0 0 0
Net Requirements 200 300
Planned Order Receipts 200 300
Planned Order Releases 200 300

Item: D LLC: 2 WEEK

Lot size: 500 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 600 900
Scheduled Receipts 500
 Production Management

Projected on Hand 200 200 100 100 600 200 200 200 200
Net Requirements 300
Planned Order Receipts 500 500
Planned Order Releases 500 500

Item: E LLC: 1-2 WEEK

Lot size: 900 LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 400 800 600 1200
Scheduled Receipts
Projected on Hand 500 500 100 100 200 500 500 200 200
Net Requirements 700 400 700
Planned Order Receipts 900 900 900
Planned Order Releases 900 900 900

Exercise 3:
Item: A LLC: 0 WEEK
Lot size: L4L LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 95 150 130
Scheduled Receipts
Projected on Hand 0 0 0 0 0 0 0 0 0
Net Requirements 95 150 130
Planned Order Receipts 95 150 130
Planned Order Releases 95 150 130

Item: B LLC: 0 WEEK

Lot size: L4L LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 80 70
Scheduled Receipts
Projected on Hand 0 0 0 0 0 0 0 0 0
Net Requirements 80 70
Planned Order Receipts 80 70
 Production Management

Planned Order Releases 80 70

Item: E LLC: 1 WEEK

Lot size: L4L LT: 3 1 2 3 4 5 6 7 8
Gross Requirements 190 300 260
Scheduled Receipts 200
Projected on Hand 85 85 95 95 0 0 0 0 0
Net Requirements 205 260
Planned Order Receipts 205 260
Planned Order Releases 205 260

Item: C LLC: 1-2 WEEK

Lot size: 250 LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 205 270 260 300 70 260
Scheduled Receipts
Projected on Hand 625 420 150 140 90 20 10 10 10
Net Requirements 110 160 240
Planned Order Receipts 250 250 250
Planned Order Releases 250 250 250

LLC:
Item: D WEEK
1-2-3
Lot size: 800 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 250 600 550 140 260
Scheduled Receipts
Projected on Hand 350 100 300 300 550 410 150 150 150
Net Requirements 500 250
Planned Order Receipts 800 800
Planned Order Releases 800 800

Exercise 4:
 Production Management

Product: A
LLC: 0 PERIOD
(Safety stock: 5)
Lot size: L4L LT: 4 1 2 3 4 5 6 7 8
Gross Requirements 103
Scheduled Receipts
Projected on Hand 8 8 8 8 8 8 8 8 5
Net Requirements 100
Planned Order Receipts 100
Planned Order Releases 100

Product: Q
LLC: 0 PERIOD
(Safety stock: 6)
Lot size: L4L LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 200
Scheduled Receipts
Projected on Hand 6 6 6 6 6 6 6 6 6
Net Requirements 200
Planned Order Receipts 200
Planned Order Releases 200

Item: B LLC: 1 PERIOD

Lot size: L4L LT: 3 1 2 3 4 5 6 7 8
Gross Requirements 100
Scheduled Receipts
Projected on Hand 10 10 10 10 0 0 0 0 0
Net Requirements 90
Planned Order Receipts 90
Planned Order Releases 90

Item: C LLC: 1 PERIOD

Lot size: L4L LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 200 200
Scheduled Receipts
 Production Management

Projected on Hand 20 20 20 20 0 0 0 0 0
Net Requirements 180 200
Planned Order Receipts 180 200
Planned Order Releases 180 200

Item: D LLC: 2 PERIOD

Lot size: 200 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 180 200
Scheduled Receipts
Projected on Hand 0 0 20 20 20 20 20 20 20
Net Requirements 180 180
Planned Order Receipts 200 200
Planned Order Releases 200 200

Item: E LLC: 1-2 PERIOD

Lot size: 500 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 360 400
Scheduled Receipts
Projected on Hand 30 30 170 270 270 270 270 270 270
Net Requirements 330 230
Planned Order Receipts 500 500
Planned Order Releases 500 500

Exercise 5:

Product: A LLC: 0 PERIOD

Lot size: L4L LT: 3 1 2 3 4 5 6 7 8
Gross Requirements 100
Scheduled Receipts
Projected on Hand 10 10 10 10 10 10 10 10 0
Net Requirements 90
Planned Order Receipts 90
Planned Order Releases 90
 Production Management

Product: B LLC: 0 PERIOD

Lot size: L4L LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 200
Scheduled Receipts
Projected on Hand 5 5 5 5 5 5 0 0 0
Net Requirements 195
Planned Order Receipts 195
Planned Order Releases 195

Item: C LLC: 1 PERIOD

Lot size: Min 50 LT: 4 1 2 3 4 5 6 7 8
Gross Requirements 270
Scheduled Receipts
Projected on Hand 140 140 140 140 140 0 0 0 0
Net Requirements 130
Planned Order Receipts 130
Planned Order Releases 130

Item: D LLC: 1 PERIOD

Lot size: 250 LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 585 180
Scheduled Receipts 250
Projected on Hand 200 200 450 450 115 185 185 185 185
Net Requirements 135 65
Planned Order Receipts 250 250
Planned Order Releases 250 250

Exercise 6:
20+ 40+30+10+ 45
d= =29
5
a. L4L
 Production Management

Product: cabinet LLC: 0 PERIOD

Lot size: L4L LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 45
Scheduled Receipts
Projected on Hand 25 5 0 0 0 0
Net Requirements 35 30 10 45
Planned Order Receipts 35 30 10 45
Planned Order Releases 35 30 10 45

Total cost = (4x$100)+(5x$1) = $405

b. EOQ

EOQ=
√ 2 Co d
Cc
=
√
2×100 × 29
1
=77

Product: cabinet LLC: 0 PERIOD

Lot size: EOQ 77 LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 45
Scheduled Receipts
Projected on Hand 25 5 42 12 2 34
Net Requirements 35 43
Planned Order Receipts 77 77
Planned Order Releases 77 77

Total cost = (2x$100) + (5+41+12+2+32) x $1 = $292

c. POQ
Q 77
POQ= = ≈ 3
d 29
Product: cabinet LLC: 0 PERIOD
Lot size: POQ 3 LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 45
Scheduled Receipts
 Production Management

Projected on Hand 25 5 40 10 0 0
Net Requirements 35 45
Planned Order Receipts 75 45
Planned Order Releases 75 45

Total cost = (2x$100) + (5+40+10) x $1 = $255

Conclusion:
The POQ should be recommended because the total cost is the lowest