Unformatted Attachment Preview
Week
Quantity
1
2
3
4
Engine Assembly Master Sch
5
Gear box requirement
Week
Gross Requirements
Scheduled Receipts
Projected Available Balance
Net Requirements
Planned Order Receipt
Planned Order Release
1
0
17
2
0
5
17
3
0
4
0
5
0
0
0
0
3
4
0
Input shaft requiremen
5
0
47
47
From E12 for 2 Weeks Lead Time
Week
Gross Requirements
Scheduled Receipts
Projected Available Balance
Net Requirements
Planned Order Receipt
Planned Order Release
1
10
30
2
20
37
47
0
From F24 for 3 Weeks Lead Time
Part 2
Gear Box
Given Information
Setup per order=
Inventory Carrying Cost per unit per period
$90.00
$2.00
Input Shaft
Given Information
Setup per order=
Inventory Carrying Cost per unit per period
$45.00
$1.00
Number of orders ( count cells with values for planned o
Set-up Costs=# of Orders X Setup Costs
(8*90)
Inventory (2+2)*Inventory Carrying Cost
Total
Setup Costs=5 orders*45
Inventory=(30+32+32+2)*1
Total
Total Cost
Engine Assembly Master Schedule
6
7
8
9
10
11
12
Gear box requirements
6
7
0
0
8
0
9
0
10
0
11
0
0
0
0
0
12
0 Since Gear box 1 X Engine Assembly, use Ma
From Problem
0 Cell B10, Beg Balance of 17- Gross Requirem
Net Req=Gross Req-Projected Available Bala
Same as row above
8
0
9
0
10
0
11
0
0
0
0
0
0
Input shaft requirements
6
7
0
0
0
0
unt cells with values for planned order release)
ers X Setup Costs
ntory Carrying Cost
$0.00
$0.00
$0.00
12
Since Input Shaft is 2 X Gear Box, then each w
From Problem
0 Cell B22, Beg Balance of 40- Gross requireme
Net Req=Gross Req-Projected Available Bala
Same as row above
Planned Order Receipt from 3 weeks in futur
box 1 X Engine Assembly, use Master Engine Assembly Qty
Cell C10 Carryover
ross Req-Projected Available Balance from prior week
Shaft is 2 X Gear Box, then each week is 2 X Row 13
Week 5 and beyond 0 since no scheduled receipts
ross Req-Projected Available Balance from prior week
Week
Quantity
1
Lead Time
2
2
3
4
Engine Assembly Master Sch
5
Gear box requirement
Week
Gross Requirements
Scheduled Receipts
Projected Available Balance
Net Requirements
Planned Order Receipt
Planned Order Release
1
0
17
2
0
5
22
3
0
4
0
5
0
0
0
0
From E12 for 2 Weeks Lead Time
Week
Gross Requirements
Scheduled Receipts
Projected Available Balance
Net Requirements
Planned Order Receipt
Planned Order Release
1
30
10
2
3
4
0
Input shaft requiremen
5
0
22
32
32
0
0
From F24 for 3 Weeks Lead Time
Part 2
Gear Box
Given Information
Setup per order=
Inventory Carrying Cost per unit per period
$90.00
$2.00
Input Shaft
Given Information
Setup per order=
Inventory Carrying Cost per unit per period
$45.00
$1.00
Number of orders ( count cells with values for planned o
Set-up Costs=# of Orders X Setup Costs
3*90)
Inventory (88)*Inventory Carrying Cost
Total
Setup Costs=2 orders*45
Inventory=(74)*1
Total
Total Cost
Engine Assembly Master Schedule
6
7
8
9
10
11
12
Gear box requirements
6
7
0
0
8
0
9
0
10
0
11
0
0
0
0
0
12
0 Since Gear box 1 X Engine Assembly, use Ma
From Problem
0 Cell B10, Beg Balance of 17- Gross Requirem
Net Req=Gross Req-Projected Available Bala
Planned order receipt=projected available ba
Stagger Order Releases to reduce Costs
8
0
9
0
10
0
11
0
0
0
0
0
0
Input shaft requirements
6
7
0
0
0
0
12
Since Input Shaft is 2 X Gear Box, then each w
From Problem
0 Cell B22, Beg Balance of 40- Gross requireme
Net Req=Gross Req-Projected Available Bala
Planned Order Receipt from 3 weeks in futur
unt cells with values for planned order release)
ers X Setup Costs
tory Carrying Cost
sum of projected available balance
$0.00
$0.00
$0.00
box 1 X Engine Assembly, use Master Engine Assembly Qty
Next cell, Gross Req-Scheduled Receipts
ross Req-Projected Available Balance from prior week
der receipt=projected available balance +net requirements
Shaft is 2 X Gear Box, then each week is 2 X Row 13
Week 4 and beyond 0 since no scheduled receipts
ross Req-Projected Available Balance from prior week
Given the cost structure, evaluate the cost of the
schedule from question 1. Assume inventory is val-
ued at the end of each week.
3 Find a better schedule by reducing the number of
orders and carrying some inventory. What are the
savings with this new schedule?
Engine assembly master schedule
Week
1
2
3
4
5
6
7
8
9
10
11
12
Quantity
Gear box requirements
1
2
3
4
5
6
7
8
9
10
11
12
Week
Gross requirements
Scheduled receipts
Projected available balance
Net requirements
Planned order release
Input shaft requirements
3
5
.
1
2
3
4
5
6
7
8
9
1
el
1
2
Week
Gross requirements
Scheduled receipts
Projected available balance
Net requirements
Planned order release
Analytics Exercise: An MRP Explosion-
Brunswick Motors
Recently, Phil Harris, the production control manager at shafts that are needed for the production of gear boxes in a
Brunswick, read an article on time-phased requirements given week must be delivered to the Subassembly Department
planning. He was curious about how this technique might stockroom before Monday morning of that week.
work in scheduling Brunswick's engine assembly opera- In preparing the MRP example Phil planned to use the
tions and decided to prepare an example to illustrate the worksheets shown on the next page and to make the fol-
use of time-phased requirements planning.
lowing assumptions:
Phil's first step was to prepare a master schedule for one 1. Seventeen gear boxes are on hand at the beginning of
of the engine types produced by Brunswick: the Model Week 1, and five gear boxes are currently on order to
1000 engine. This schedule indicates the number of units of be delivered at the start of Week 2.
the Model 1000 engine to be assembled each week during 2. Forty input shafts are on hand at the start of Week 1,
the last 12 weeks and is shown below. Next, Phil decided to and 22 are scheduled for delivery at the beginning of
simplify his requirements planning example by considering Week 2.
only two of the many components that are needed to com-
plete the assembly of the Model 1000 engine. These two Questions
components, the gear box and the input shaft, are shown
1 Initially, assume that Phil wants to minimize his in-
in the product structure diagram below. Phil noted that the
ventory requirements. Assume that each order will be
gear box is assembled by the Subassembly Department and
only for what is required for a single period. Using the
subsequently is sent to the main engine assembly line. The
following forms, calculate the net requirements and
input shaft is one of several component parts manufactured
planned order releases for the gear boxes and input
by Brunswick that are needed to produce a gear box subas-
shafts. Assume that lot sizing is done using lot-for-lot
sembly. Thus, levels 0, 1, and 2 are included in the prod- (L4L).
uct structure diagram to indicate the three manufacturing 2 Phil would like to consider the costs that his accoun-
stages that are involved in producing an engine: the Engine
tants are currently using for inventory carrying and
Assembly Department, the Subassembly Department, and
setup for the gear boxes and input shafts. These costs
the Machine Shop
are as follows:
The manufacturing lead times required to produce the gear
box and input shaft components are also indicated in the prod- PART
COST
uct structure diagram. Note that two weeks are required to pro- Gear Box Setup = $90/order
duce a batch of gear boxes and that all the gear boxes must be
Inventory carrying cost = $2/unit/week
delivered to the assembly line parts stockroom before Monday
Input Shaft Setup = $45/order
morning of the week in which they are to be used. Likewise,
it takes three weeks to produce a lot of input shafts, and all the
Inventory carrying cost = $1/unit/week
Model 1000 master schedule
Week 1
Demand 15
2 3
5 7
4 5 6 7 8 9
10 15 20 10
10 11 12
8 2 16
Model 1000 product structure
Engine assembly
Crankcase
Gear box
Lead time = 2 weeks
Used: 1 per engine
Input shaft
Lead time = 3 weeks
Used: 2 per gear box
Analytics Exercise: An MRP Explosion-
Brunswick Motors
Recently, Phil Harris, the production control manager at shafts that are needed for the production of gear boxes in a
Brunswick, read an article on time-phased requirements given week must be delivered to the Subassembly Department
planning. He was curious about how this technique might stockroom before Monday morning of that week.
work in scheduling Brunswick's engine assembly opera- In preparing the MRP example Phil planned to use the
tions and decided to prepare an example to illustrate the worksheets shown on the next page and to make the fol-
use of time-phased requirements planning.
lowing assumptions:
Phil's first step was to prepare a master schedule for one 1. Seventeen gear boxes are on hand at the beginning of
of the engine types produced by Brunswick: the Model Week 1, and five gear boxes are currently on order to
1000 engine. This schedule indicates the number of units of be delivered at the start of Week 2.
the Model 1000 engine to be assembled each week during 2. Forty input shafts are on hand at the start of Week 1,
the last 12 weeks and is shown below. Next, Phil decided to and 22 are scheduled for delivery at the beginning of
simplify his requirements planning example by considering Week 2.
only two of the many components that are needed to com-
plete the assembly of the Model 1000 engine. These two Questions
components, the gear box and the input shaft, are shown
1 Initially, assume that Phil wants to minimize his in-
in the product structure diagram below. Phil noted that the
ventory requirements. Assume that each order will be
gear box is assembled by the Subassembly Department and
only for what is required for a single period. Using the
subsequently is sent to the main engine assembly line. The
following forms, calculate the net requirements and
input shaft is one of several component parts manufactured
planned order releases for the gear boxes and input
by Brunswick that are needed to produce a gear box subas-
shafts. Assume that lot sizing is done using lot-for-lot
sembly. Thus, levels 0, 1, and 2 are included in the prod- (L4L).
uct structure diagram to indicate the three manufacturing 2 Phil would like to consider the costs that his accoun-
stages that are involved in producing an engine: the Engine
tants are currently using for inventory carrying and
Assembly Department, the Subassembly Department, and
setup for the gear boxes and input shafts. These costs
the Machine Shop
are as follows:
The manufacturing lead times required to produce the gear
box and input shaft components are also indicated in the prod- PART
COST
uct structure diagram. Note that two weeks are required to pro- Gear Box Setup = $90/order
duce a batch of gear boxes and that all the gear boxes must be
Inventory carrying cost = $2/unit/week
delivered to the assembly line parts stockroom before Monday
Input Shaft Setup = $45/order
morning of the week in which they are to be used. Likewise,
it takes three weeks to produce a lot of input shafts, and all the
Inventory carrying cost = $1/unit/week