Dumfries Industries is generating a materials requirement plan for the next 6 we

Question

Dumfries Industries is generating a materials requirement plan for the next 6 weeks. Here is its most current information (using excel):

a. How many levels does a product structure for Dumfries’ item A have?

b. Using MRP methodology, how much of parts A, B, and C should be ordered, and when should they be ordered?

c. Which item will experience the highest ending inventory, following this plan?

Master Production Schedule: Week: Item A: 4 20 6 10 10 10 0 20 Other Information: Items's Lead TimeItem's Lot Size Item's current On-Hand Inventory LFL 20 50 ItemItem's Parent None 1 week 1 week 1 week 20 20 20

Explanation / Answer

a.How many levels does a product structure for Dumfries’ item A have?

There are three levels of product structure A have for Dumfries’ item.

b.   Using MRP methodology, how much of parts A, B, and C should be ordered, and when should they be ordered?

Part A: 10 in week 2, 20 in week 3, 10 in week 4, 10 in week 5

Part B: 20 in week 3, 20 in week 4

Part C: 50 in week 4

Calculation-

c. Which item will experience the highest ending inventory, following this plan?

Item C has the highest ending inventory as per this plan. Ending inventory for Item C is 10.

Master production Schedule Week 1 2 3 4 5 6 Item A 10 0 20 20 10 10 Other Information Item Item's Parent Item's lead time Item's Lot size Item's Current on hand Inventory A None 1 week LFL 20 B A 1 week 20 20 C B 1 week 50 20 Item A 1 2 3 4 5 6 Gross Requirements 10 0 20 20 10 10 Scheduled Receipts Product on-Hand, 20 20 10 0 0 0 0 Net Requirements Planned order receipts 10 20 10 10 Planned order Releases 10 20 10 10 Item B 1 2 3 4 5 6 Gross Requirements 10 0 20 20 10 Scheduled Receipts Product on-Hand, 20 20 10 10 10 10 0 Net Requirements Planned order receipts 20 20 Planned order Releases 20 20 Item C 1 2 3 4 5 6 Gross Requirements 10 0 20 20 Scheduled Receipts Product on-Hand, 20 20 20 10 10 30 10 Net Requirements Planned order receipts 50 Planned order Releases 50

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