A company produces an end item $$E$.$ One unit of item $$E$$ can be made by assembling $1$ unit of A$,1$

unit of B$,$ and $2$ units of C$.$ One unit of A is made of $1$ unit of C and $2$ units of D; one unit of B is

assembled by using $2$ units of M and $1$ unit of N$.$ On$-$hand inventories are $50$ units of A and $45$ units

of C$.$ Scheduled receipts are $50$ units of A at the beginning of Week $1,100$ units of C at the beginning

of Week $1,$ and $100$ units of C at the beginning of Week $2.$

Lead times for subassemblies A and B are $1$ week, and lead times for other components are $2$

weeks. Final assembly of E requires $1$ week.

$1.$ Fill in Table $1$ to prepare a master production schedule for end item $$E$$ using the fixed$-$periodof$-$two policy. The beginning inventory for E is $108$ units; the forecast and promised customer

orders for end item E are provided in this table. $[4$ marks$]$

Week $12345678$

Forecast $4545506060505045$

Customer orders $($committed$)42385135201510$

Projected on$-$hand inventory

Net Inventory before MPS

MPS Receipt

MPS Start

Available$-$to$-$promise inventory $($uncommitted$)$

Table $1$: MPS table for end item E in Question $1$

$2.$ Construct a product structure tree $($i$.$e$.,$ a BOM chart$).[4$ marks$]$

Answer:

$1$

BUS $2211$: Operations Management Assignment $4$

$3.$ Use your master production schedule $($i$.$e$.,$ MPS Start$)$ in Table $1$ to develop a material requirement plan $($MRP$)$ for subassembly A using the lot$-$for$-$lot policy. $[4$ marks$]$

Week $12345678$

MPS Start for E

A

Lead Time: $1$ week; On Hand: $50$ units; Lot Size: lot$-$for$-$lot;

Scheduled Receipts: $50$ units in Week $1$

Gross Requirement

Scheduled Receipts

Projected On Hand

Net Requirements

PO Receipts

PO Releases

$4.$ Use your master production schedule in Table $1$ and your MRP schedule for subassembly A to

develop a material requirement plan $($MRP$)$ for component C using the lot size of $100$ units

ordering policy. $[4$ marks$]$

Week $12345678$

C

Lead Time: $2$ weeks; On Hand: $45$ units; Lot Size: $100$ units;

Scheduled Receipts: $100$ units in Week $1$ and $100$ units in Week $2$

Gross Requirement

Scheduled Receipts

Projected On Hand

Net Requirements

PO Receipts

PO Releases

$5.$ You are required to calculate the total inventory cost for component C during the

eight weeks. Note that, for each week, the inventory cost includes a fixed cost and a holding

cost$.$ We assume that the per order fixed cost is $$200/$order$,$ and the unit holding cost is $$1$

per item per week. The fixed cost is incurred each time when the firm places an order. More

precisely, if the firm places an order at the beginning of a week, then the firm incurs the fixed

cost for this week; otherwise, the fixed cost for the week is zero. The holding cost is calculated

according to the number of remaining items at the end of each week. For example, if $10$ units

of component C are remaining at the end of a week, then the holding cost for this week is

$10\backslash$times $$1=$ $$10.[4$ marks$]$

Answer:

$2$

BUS $2211$: Operations Management Assignment $4$

$6.$ Use your master production schedule in Table $1$ and your MRP schedule for subassembly A to

develop a material requirement plan $($MRP$)$ for component C using fixed$-$period$-$of$-$two policy.

$[4$ marks$]$

Week $12345678$

C

Lead Time: $2$ weeks; On Hand: $45$ units;

Lot Size: fixed$-$period$-$of$-2$;

Scheduled Receipts: $100$ units in Week $1,100$ units in Week $2$

Gross Requirement

Scheduled Receipts

Projected On Hand

Net Requirements

PO Receipts

PO Releases

$7.$ Calculate the total inventory cost for the fixed$-$period$-$of$-$two policy in Question $6.$ The per order

fixed cost is still $$200/$order$,$ and the unit holding cost is still $$1$ per item per week.