Given the information below, determine the gross & net requirements of the raw m

ID: 347895 • Letter: G

Question

Given the information below, determine the gross & net requirements of the raw materials.

If any of the raw materials result in a positive balance, when does the order need to be placed with the supplier?

Finished Good, Item A – MPS = 30,000 in week 9

BOM – single level

Raw Material Item B (1)

Raw Material Item C (1)

Raw Material Item D (20)

Current Inventories:

Raw Material Item B = 20,000

Raw Material Item C = 10,000

Raw Material Item D = 30,000

On Order (all due in current period):

Item B = 0 on order

Item C = 10,000 on order

Item D = 560,000 on order

Supplier leadtimes = 2 weeks.

No leadtime required upon receipt to release product, meaning, raw materials are available the same week they are received.

Gross requirement of Item B = MPS of item A * usage factor = 30000*1 = 30000

Gross requirement of Item C = MPS of item A * usage factor = 30000*1 = 30000

Gross requirement of Item D = MPS of item A * usage factor = 30000*20 = 600000

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Net requirement of Item B = Gross requirement - Current Inventories - On Order in current period = 30000 - 20000 - 0 = 10000

Net requirement of Item C = Gross requirement - Current Inventories - On Order in current period = 30000 - 10000 - 10000 = 10000

Net requirement of Item D = Gross requirement - Current Inventories - On Order in current period = 600000 - 30000 - 560000 = 10000

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Supplier lead time is 2 weeks. Finished item A is required in week 9. Therefore, order needs to placed with the supplier in week 7

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