ADDIS ABABA UNIVERSITY

ADDIS ABABA INSTITUTE OF TECHNOLOGY (AAiT)

SCHOOL OF MECHANICAL AND INDUSTRIAL ENGINEERING
Production and Operations Management
Assignment Five
Part I: Essay Type Questions
1. Contrast independent and dependent demand.
2. When is MRP appropriate?
3. Briefly define or explain each of these terms.
a) Master schedule.
b) Bill of materials.
c) Inventory records.
d) Gross requirements.
e) Net requirements.
f) Time-phased plan.
4. How is safety stock included in a material requirements plan?
5. What factors can create safety stock requirements in an MRP system?
6. What is meant by the term safety time?
7. Contrast net-change systems and regenerative systems for MRP.
8. Briefly discuss the requirements for effective MRP.
9. What are some of the main advantages and limitations of MRP?
10. How can the use of MRP contribute to productivity?
11. Briefly describe MRP II and closed-loop MRP.
12. What is lot sizing, what is its goal, and why is it an issue with lumpy demand?
13. Contrast planned-order receipts and scheduled receipts.
14. If seasonal variations are present, is their incorporation into MRP fairly simple or fairly
difficult? Explain briefly.
15. How does the purpose of ERP differ from the purpose of MRP II?
16. What are some unforeseen costs of ERP?
Part II: Problems Type Questions

1. A) Given the following diagram for a product, determine the quantity of each component
required to assemble one unit of the finished product.

B). Draw a tree diagram for a stapler given the following bill of materials:

2. The following table lists the components needed to assemble an end item, lead times, and
quantities on hand.

a) If 20 units of the end item are to be assembled, how many additional units of E are
needed?( Hint: You don’t need to develop an MRP plan to determine this.)
b) An order for the end item is scheduled to be shipped at the start of week 11. What is the
latest week that the order can be started and still be ready to ship on time? ( Hint: You
don’t need to develop an MRP plan for this part either.)
3. The following table lists the components needed to assemble an end item, lead times (in
weeks), and quantities on hand.

a. If 40 units of the end item are to be assembled, how many additional units of B are needed?
( Hint: You don’t need to develop an MRP plan.)
b. An order for the end item is scheduled to be shipped at the start of week 8. What is the latest
week that the order can be started and still be ready to ship on time? ( Hint: You don’t need
to develop an MRP plan.)
4. Eighty units of end item E are needed at the beginning of week 6. Three cases (30 units per
case) of J have been ordered and one case is scheduled to arrive in week 3, one in week 4,
and one in week 5. Note: J must be ordered by the case, and B must be produced in multiples
of 120 units. There are 60 units of B and 20 units of J now on hand. Lead times are two weeks
each for E and B, and one week for J.

a) Prepare a material requirements plan for component J.

b) Suppose that in week 4 the quantity of E needed is changed from 80 to 70. The planned-
order releases through week 3 have all been executed. How many more Bs and Js will be
on hand in week 6?
5. a.) One hundred twenty units of end item Z are needed at the beginning of week 7. Prepare a
material requirements plan for component C. Take into account that on hand there are 40
units of Z, 70 units of A, 100 units of B, and 30 units of C. Also, there is a scheduled receipt
 of 20 units of component C in week 4. Lead times are two weeks for Z and B, and one week
for the other components. Lot for-lot ordering will be used for all items.

b) Ninety-five units of end item E are needed at the beginning of week 7. Prepare a material
requirements plan for component D. Take into account that 5 units of E are currently on hand,
as well as 50 units of B, 100 units of C, and 80 units of D. Also, 30 units of C have been
outsourced and are expected to arrive in week 4. Lead times are two weeks for E and C, and
one week for the other components. Assume lot-for-lot ordering except for D, where multiples
of 40 must be used.

6. A table is assembled using three components, as shown in the accompanying product structure
tree. The company that makes the table wants to ship 100 units at the beginning of day 4, 150
units at the beginning of day 5, and 200 units at the beginning of day 7. Receipts of 100 wood
sections are scheduled at the beginning of day 2. There are 120 legs on hand. There are 60
braces on hand. Lead times (in days) for all items are shown in the following table. Prepare a
material requirements plan using lot-for-lot ordering.
7. Eighty units of end item X are needed at the beginning of week 6, and another 30 units are
needed at the beginning of week 8. Prepare a material requirements plan for component D. D
can only be ordered in whole cases (50 units per case). One case of D is automatically received
every other week, beginning in week 1 (i.e., weeks 1, 3, 5, 7). Lot-for-lot ordering will be used
for all items except D. Also, there are 30 units of B and 20 units of D now on hand. Lead times
for all items are a function of quantity: one week for up to 100 units, two weeks for 101 to 200
units, three weeks for 201 to 300 units, and four weeks for 301 or more units.

8. Oh No!, Inc., sells three models of radar detector units. It buys the three basic models (E, F,
and G) from a Japanese manufacturer and adds one, two, or four lights (component D) to
further differentiate the models. D is bought from a domestic producer.

Lead times are one week for all items except C, which is two weeks. There are ample supplies of
the basic units (E, F, and G) on hand. There are also 10 units of B, 10 units of C, and 25 units of
D on hand. Lot-sizing rules are lot-for-lot ordering for all items except D, which must be ordered
in multiples of 100 units. There is a scheduled receipt of 100 units of D in week 1. The master
schedule calls for 40 units of A in week 4, 60 units of B in week 5, and 30 units of C in week 6.
Prepare a material requirements plan for D and its parents.
9. Using the diagram below, do the following:
a. Draw a tree diagram for the scissors.
b. Prepare an MRP plan for scissors
. Lead times are one day for each component and final scissor assembly, but two days for the
plastic grips. Six hundred pairs of scissors are needed on day 6. Note: There are 200 straight blades
and 350 bent blades on hand, and 40 top blade assemblies on hand. Use lot-for-lot ordering for all
items.

10. Assume that you are the manager of Assembly, Inc. You have just received an order for 40
units of an industrial robot, which is to be delivered at the start of week 7 of your schedule.
Using the following information, determine how many units of subassembly G to order and
the timing of those orders, given that subassembly G must be ordered in multiples of 80 units
and all other components are ordered lot-for-lot. Assume that the components are used only
for this particular robot.

11. A firm that produces electric golf carts has just received an order for 200 carts, which must be
ready for delivery at the start of week 8. Information concerning the product structure, lead
times, and quantities on hand is shown in the following table. Use this information to do each
of the following:
a. Construct a product tree.
b. Construct an assembly time chart.
 c. Develop a material requirements plan that will provide 200 golf carts by week
8 assuming lot for-lot ordering.

12. A company that manufactures paving material for driveways and parking lots expects the
following demand for its product for the next four weeks:

The company’s labor and machine standards and available capacities are as follows:

a. Determine the capacity utilization for labor and machine for each of the four weeks.
b. In which weeks do you foresee a problem? What options would you suggest to
resolve any problems? What costs are relevant in making a decision on choosing
an option?

Submission Date: December 4, 2018