(a) KANJAR Company is a manufacturer of light aircraft components in Oman. For the past two years of operation, the company is experiencing production backlog. A number of its customers are complaining for long delays of deliveries. This backlog is hurting the competitive advantage and the profitability of the company. In order to address this issue, the operation manager decides to implement the following possible alternatives; production overtime, subcontracting, and possible hiring of additional workers if necessary. The company always prepares a nine-month aggregate plan to decide the optimum way to determine requirements for planning purposes, although this is modified when the demand requirements change. The estimated demand for a particular unit for the period January through September is given in Table Q3(a). The current workforce is based on the production level in the previous December. Operating data are given in Table Q3(b). Requirement: (i) Develop an aggregate plan AP based on level capacity strategy specified for the planning period. Subcontract to meet a 100% service level every month and no overtime, no hiring, and no termination. Show graphically the demand forecast, actual production output, and ending inventory in single graph. Determine the total production cost for the specified period. [7] (ii) Table Q3(c) shows the demand orders of aircraft component of a local customer from January to September. Develop a master planning schedule MPS, assuming production lot size of 800 units, and beginning inventory intended for the particular customer is 150 units. In your MPS indicate the projected available balance PAB and the MPS per month. [3]

TableQ3(a): Veatch Company Estimated demand for a product

(b) Salalah Electro-Mechanical Company manufactures a product PQR345. The product PQR345 consists of two PQ890 assemblies, three QR432 assemblies and one PR678 assembly. The PQ890 assembly consists of one P456, two Q921 and one Q239. The QR432 assembly consists of three P456, one R478 and two S590. (i) Prepare a Bill of Material (BOM) product tree for the product PQR345. [2] (ii) Using Table Q3(b)-1 and Table Q3(b)-2 complete the Material Requirements Planning (MRP) calculations to determine when the Purchase Orders should be placed for item S590. Note: The product PQR345 are being sold complete as well as the spare parts (e.g. items QR432, PQ890, R478 etc) are being sold separately also. [4]

Jan 1,935 TableQ3(a): Veatch Company Estimated demand for a product Feb Mar April May June July 2,000 2,250 2,125 2,450 2,700 2,250 August 1,900 Sep 1,650 Table Q3(b): Veatch Company Operating data Items Amount Initial inventory (units) 400 Stockout costs 125 (OMR/unit) Carrying cost, 30 (OMR/unit/month) Hiring cost per unit 70 (OMR/unit) Termination cost per 85 unit (OMR/unit) Subcontract cost 85 (OMR/unit) Production units the 1,500 previous December In-house production 75 cost, (OMR/unit) Labor hours/ unit 3.2 Workweek (hours) 40 Weeks/month Jan Feb Table Q3(c): Veatch Company Operating data Mar April May June 350 550 500 650 August Sep July 600 300 450 750 700 Table Q3(b)-1 12 10 13 14 15 Week PQR345 QR432 11 50 120 90 70 100 60 250 100 150 16 40 100 Table Q3(b)-2 Item Lead Time (Weeks) On Hand Batch Size Safety Stock 350 200 0 PQR345 QR432 S590 2 350 300 150 2 850 600 350 Jan 1,935 TableQ3(a): Veatch Company Estimated demand for a product Feb Mar April May June July 2,000 2,250 2,125 2,450 2,700 2,250 August 1,900 Sep 1,650 Table Q3(b): Veatch Company Operating data Items Amount Initial inventory (units) 400 Stockout costs 125 (OMR/unit) Carrying cost, 30 (OMR/unit/month) Hiring cost per unit 70 (OMR/unit) Termination cost per 85 unit (OMR/unit) Subcontract cost 85 (OMR/unit) Production units the 1,500 previous December In-house production 75 cost, (OMR/unit) Labor hours/ unit 3.2 Workweek (hours) 40 Weeks/month Jan Feb Table Q3(c): Veatch Company Operating data Mar April May June 350 550 500 650 August Sep July 600 300 450 750 700 Table Q3(b)-1 12 10 13 14 15 Week PQR345 QR432 11 50 120 90 70 100 60 250 100 150 16 40 100 Table Q3(b)-2 Item Lead Time (Weeks) On Hand Batch Size Safety Stock 350 200 0 PQR345 QR432 S590 2 350 300 150 2 850 600 350