02.10.

2017

IE 323
Production Planning, Design and Control
QUIZ 1 - KEY

Oscorp Industries produces web-shooters and the net requirements for this specific item is
given in table below. The production of the web-shooter takes 2 weeks. Setup cost is $90 per
production, holding cost per unit per week is $1 and Oscorp Industries currently have
20web-shooters on-hand.

Fill out the below MRP table using Silver-Meal lot sizing rule and calculate total cost.

Week 1 2 3 4 5 6 7 8 9 10
Gross Requirements 0 0 60 20 15 60 50 45 15 35
Scheduled Receipts 0 10 0 0 0 0 20 5 0 0
Net Requirements 0 0 30 20 15 60 30 40 15 35
Time-phased net requirements 30 20 15 60 30 40 15 35 0 0
Planned order release 65 0 0 90 0 55 0 35 0 0
Planned deliveries 0 0 65 0 0 90 0 55 0 35
Ending inventory 20 20 30 35 15 0 30 0 15 0 0

On-hand inventory = 20 units

Set-up cost = $90/product
Holding cost = $1/unit/week
r = (30,20,15,60,30,40,15,35)
Silver-meal Heuristic
C (1) = K = 90
C (2) = (90+1*20)/2=55
C (3) = (90+1*20+1*2*15)/3 = 46.6
C (4) = (90+20+30+1*3*60)/4 = 80
C (4) > C (3) STOP order;
y1 = r1+ r2+ r3= 30+20+15 = 65
Starting in period 4,
C (1) = 90
C (2) = (90+1*30)/2 = 60
C (3) = (90+1*30+1*2*40)/3 = 66
C (3) > C(2) STOP order;
y4 = r4+ r5 = 60+30 = 90
Starting in period 6,
C (1) = 90
C (2) = (90+1*15) / 2= 52.5
C (3) = (90+1*15+1*2*35)/3 = 58.3
C (3)>C (2) STOP order;
y6 = r6+ r7 = 40+15 = 55

y = (60,0,0,90,0,55,0,35)

TOTAL COST= 4*90+ 1*(20+30+35+15+30+15)=505