please answer question 1,2,3 ? Background - Doug's Dens doghouses
Analysis
Q1 ( using MRP effectively ?)
Q2
Recommedation
Q3 (MRP Implementation)
276 PART Tools and Tactical issues CASE STUDY Doug's Dens Marketing Cathy Franks ran the marketing area of Doug's Dens. When Doug came to talk to her, she showed him the mar. keting plan and forecast for the follow. ing 12 months. The plans show the master schedule for the two items for the coming 12 months and are shown in Table 7.25. Cathy told Doug, "We generally are pretty accurate on yearly sales for each of these products, but there is more inaccuracy regarding when these sales occur. To level demand out, we will occasionally run specials and discount Charlie's Castle to spur more sales." Production The production department was super A custom-built doghouse. vised by Doug's best friend, Kevin Jones, who had studied entomology in college All products were custom assembled for DO oug Johnson is a 25-year-old entrepreneur who a particular customer order, typically in started his own business while in college. Here batches of one. There was a high degree of common sponded to an ad in the college newspaper seeking a ality in parts because roots were made from one of student who was willing to build a doghouse for a five types of shingle, siding consisted of one of three family's Brittany spaniel. The job went well-he de types, and floors were one of four types. Dens were signed and built a doghouse that any dog would love. More importantly, the pet's owners were very im- assembled from three main subassemblies: floor and foundation, frame, and roof. When a customer order pressed and referred Doug to several of their friends was received, a production order was generated for Soon, Doug had more orders than he could keep up each of the three subassemblies. Once each of the with, so he hired a friend of his. Within a year of graduating from college, Doug was running a business final product was started. This system had worked three subassemblies was finished, assembly of the with annual revenues of $800,000 and two employ. well for the first two years of the business but had ees. At present, the business has annual revenues of 53.2 million and has built dens not only for dogs, but seemed to be less effective in the past six months. also for cats, snakes, lizards, gerbils, rabbits, and even Purchasing one llama! Denise Mina was in charge of the purchasing depart Recently, Doug has been noticing more and more problems with inventory shortages and late delivery ment. Because of the fast growth of Doug's Dens and times. The promised lead time for a final product is its relatively small size, most of the purchasing was usually 3 weeks, but in the past year lead times have done from the closest Home Depot store. Denise skyrocketed to an average of 8 weeks. Doug decided it compile an order to be placed on Thursday. Home would check the inventory of every item used and was time to investigate, so he chose two of his more popular designs, the entry-level Fido's Favorite and Depot would then deliver the order on Friday, When the more upscale Charlie's Castle. He met with his there was a shortage of a critical item, Denise often various employees to discuss potential causes of in- found herself driving to the Home Depot, buying the ventory problems with these two products, necessary item, and carrying it back to work in the back of her pickup truck. Because Doug's did $1.5 CHAPTER 7. Dependent Demand Inventory 277 million worth of business with Home Depot per year, it had negotiated a contract that provided the com- pany with a 10 percent discount off the normal, walk- up price. QUESTIONS 3. Discuss how Doug should go about implementing MRP. What type of training should he provide? What kind of software and equipment? How long should he allow for the implementation? 4. A business consultant suggested that Doug's Dens build a master schedule at the subassembly level Cie., for the floor, roof, and frame assemblies) rather than at the finished product level (I.e., Fido's Favorite and Charlie's Castle). The consul- tant said that this is the approach used by Dell (Doug idolizes Michael Dell as a role model). Dis. cuss whether this approach makes sense and ex- plain why or why not. 1. Is Doug's Dens a business that can effectively utilize MRP for planning its inventory? Why or why not? 2. Develop a material requirements plan for the next 8 weeks using the information in Table 7.25 and, on the next page, Table 7.26 and Figure 7.18. TABLE 7.25 Master Schedule Month Week 1 1 Fido's Favorite Charlie's Castle 4 3 2 5 3 3 3 2 3 5 4 4 4 5 2 2 6 2 PART II Tools and Tactical issues 7 3 3 3 8 15 12 3 8 10 4 10 8 5 10 20 6 9 15 7 9 12 8 8 10 9 8 12 10 10 10 11 11 10 12 278 PART II Tools and Tactical Issues TABLE 7.26 Current Ordering Policy for Doug's Dens Part/Subassembly Order Quantity/Reorder Point Corner brackets Q = 1,000; R = 500 6-foot 2 x 4 Q = 4,000; R = 1,000 2-inch nails Q = 10,000; R = 1,000 Fido's Favorite BASIC floor sub-assembly Frame sub-assembly BASIC roof sub-assembly 8 corner brackets 24 2-inch nails 12 6-foot 2 x 4's Charlie's Castle DELUXE floor sub-assembly Frame sub-assembly DELUXE roof sub-assembly 8 comer brackets 24 2-inch nails 12 6-foot 2 x 4's FIGURE 7.18 Partial BOM for Fido's Favorite and Charlie's Castle Ch Case ata BE Share Data Review View Tell me Formulas Insert Draw Page Layout dose ev We 28-O. General - A A Delete Ideas Cal Body $% th Conditional Format Forming as Table Styles Select Q 0 M P N 5 T R G 1 1 FAZO B 60 Stock 100 Stock D LT-0 2 3 SO 30 E F LAL 4 5 VO 40 LT. 2 3 30 20 LAL 4 5 50 40 6 20 1 30 2 7 f Fide's Favorite (BASIC) Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release 8 40 7 20 6 60 1 60 8 40 7 301 8 8 8 Charlie's Castle (DELUXE) Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release 301 0 10 60 D 40 0 0 20 20 0 30 30 0 40 40 0 60 60 O 30 30 0 40 40 ol 40 40 0 20 20 O 20 20 D 20 20 SO 40 LT weeks LT-1 week LAL 3 20 FOQ-50 3 4 20 30 6 20 1 o 2 0 4 50 5 40 8 40 2 0 7 20 5 40 8 40 6 60 7 10 Bask floor Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release Deluxe Floor Week Gross requirements Scheduled receipts Planned OM Inventory Planned receipts Planned Order release 0 -20 -90 -110 0 0 50 0 -150 0 220 0 0 0 0 o 20 0 -70 -110 -130 -150-190 0 0 0 0 go LT-Oweeks L4L LTO weeks 1 5 1 L4L 3 20 6 60 2 ol 5 40 7 30 2 0 8 40 61 20 4 50 7 20 B 40 40 0 201 30 Basic Roof Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release Deluxe Roof Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release Foto -20 0 0 ol ol 20 0 -50 0 -90 ol -150 0 180 0 -220 0 0 ol -70 -110 130 -150 -190 0 0 0 ol LT-1 week 1 0 6 FOQ50 3 4 40 80 2 0 5 80 7 50 80 80 Framewb-assemblies Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release O 200 40 0 -120 0 -280 0 330 0 410 0 0 1001000 + REU Chz CaseData Draw Home Page Layout Formulas Data Review View Tell me General X Calibri (Bodyl 28-04 - A A WE Delete Conditional Format Call Formatting an obte Styles Find Select B TV T7 Xfx a E R L M N G T O H U P 1 B 1 C F 5 A LT-week 2 1 O 3 0 FOQ-1000 4 0 5 0 6 0 71 0 0 34 Corner Brackets (8 per) 35 Week 36 Gross requirements 37 Scheduled receipts 38 Planned OH Inventory 39 Manned receipts 40 Planned Order release 0 0 0 0 0 0 0 ol 0 0 0 0 0 O 0 LT-Oweek 1 0 71 2 0 FOQ-5000 4 0 3 0 5 0 6 0 8 0 O o 0 0 0 0 O 0 D O O 0 0 0 LT-1 week LT-1 week 42 Nails (24 per 43 Week 44 Gross requirements 45 Scheduled receipts 46 Panned OH Inventory 47 Planned receipts 48 Planned Order release 49 50 24 (12 per 51 Week 52 Gross requirements 53 Scheduled receipts 54 Planned OH Inventory 55 Planned receipts 56 Planned Order release 57 58 59 FOQ800 4 FOQ - 400 3 1 21 3 5 4 6 6 O 7 0 1 0 2 0 S 0 7 0 8 0 O 0 QUESTION 2 24 (12 per Week Gross requirements Scheduled receipts Planned OH inventory Planned receipts Planned Order release O 0 0 o 0 O ol o 0 0 0 0 0 0 0 0 0 0 0 O ol 0 0 0 0 O 0 LT-1 week 14L 4 1 0 2 ol 3 0 5 0 7 0 O 0 0 2.4 (12 per Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release 62 0 0 0 0 0 o ol D o 0 O 0 0 ol 65 66 Case MacBook Air AutoSave OFF Ch7_CaseDocument (1) - Compatibility Mode-Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Tell me 21 5 Aa Bbc dee Aalb Cedte AaB Times New... 12 ' Aav A BI web x x ADA Paste Normal No Spacing v Hear CHAPTER 7 CASE ANALYSIS QUESTIONS- USE THE TEMPLATE Doug's Dens doghouses have become wildly popular. In fact, demand has increased to the values below. Revised Master Schedule for Deup's Dens Week 1 2 3 4 5 6 7 8 Fido's Favorite 40 50 30 30 40 60 30 40 Charlie's Castle 30 30 20 50 40 20 20 40 Because of product returns and other factors, there is a current on-hand balance of 100 and 60 units for Fido's Favorite and Charlie's Castle, respectively. To increase efficiency, Doug's has started producing basic floor and frame subassemblies in batches of 50. Due to larger volume production, lead times have increased to 1 week for basic floor subassemblies and frame subassemblies. Doug's has started purchasing comer brackets in quantities of 1000, nails in quantities of 5000, and 2x4's in quantities of 800 in order to obtain better pricing. The lead-time for 2x4's has gone to 1 week. Figure 7.18 (p. 278) is necessary to develop the material plan EXCEL ANALYSIS 1. Develop a material plan for Doug's Dens, including: Fido's Favorite Charlie's Castle BASIC floor sub-assembly (I per Fido) BASIC roof sub-assembly (1 per Fido) DELUX floor sub-assembly (per Charlie) DELUXE roof subassembly (I per Charlie) Frame sub-assembly (I per Fido and I per Charlie) Corner brackets (8 per Frame subassembly) 2-Inch Nails (24 per Frame sub-assembly) 6-foot 2x4's (12 per Frame sub-assembly) 2. Doug's is concerned about carrying costs (physical storage, potential for damage, and cost of capital) for 2x4's. Compare the average inventory of 2x4's with a lot size of 800 versus a lot for lot policy and a lot size of 400 Write-up will include the background, have the 10 MRP records and an explanation of what you did for each as your analysis and final values as the recommendations. YOU SHOULD HAVE 10 MRP RECORDS 2 mere for 12) (example below) Fide's Favorite-141 100 hand Week 1 2 3 4 5 6 7 8 Gross requirements 40 500 1000 1040 Scheduled receipts Planned OH ventory 60 10 0 0 0 0 0 Planned receipts 203040601040 Planned Order release 2014040 276 PART Tools and Tactical issues CASE STUDY Doug's Dens Marketing Cathy Franks ran the marketing area of Doug's Dens. When Doug came to talk to her, she showed him the mar. keting plan and forecast for the follow. ing 12 months. The plans show the master schedule for the two items for the coming 12 months and are shown in Table 7.25. Cathy told Doug, "We generally are pretty accurate on yearly sales for each of these products, but there is more inaccuracy regarding when these sales occur. To level demand out, we will occasionally run specials and discount Charlie's Castle to spur more sales." Production The production department was super A custom-built doghouse. vised by Doug's best friend, Kevin Jones, who had studied entomology in college All products were custom assembled for DO oug Johnson is a 25-year-old entrepreneur who a particular customer order, typically in started his own business while in college. Here batches of one. There was a high degree of common sponded to an ad in the college newspaper seeking a ality in parts because roots were made from one of student who was willing to build a doghouse for a five types of shingle, siding consisted of one of three family's Brittany spaniel. The job went well-he de types, and floors were one of four types. Dens were signed and built a doghouse that any dog would love. More importantly, the pet's owners were very im- assembled from three main subassemblies: floor and foundation, frame, and roof. When a customer order pressed and referred Doug to several of their friends was received, a production order was generated for Soon, Doug had more orders than he could keep up each of the three subassemblies. Once each of the with, so he hired a friend of his. Within a year of graduating from college, Doug was running a business final product was started. This system had worked three subassemblies was finished, assembly of the with annual revenues of $800,000 and two employ. well for the first two years of the business but had ees. At present, the business has annual revenues of 53.2 million and has built dens not only for dogs, but seemed to be less effective in the past six months. also for cats, snakes, lizards, gerbils, rabbits, and even Purchasing one llama! Denise Mina was in charge of the purchasing depart Recently, Doug has been noticing more and more problems with inventory shortages and late delivery ment. Because of the fast growth of Doug's Dens and times. The promised lead time for a final product is its relatively small size, most of the purchasing was usually 3 weeks, but in the past year lead times have done from the closest Home Depot store. Denise skyrocketed to an average of 8 weeks. Doug decided it compile an order to be placed on Thursday. Home would check the inventory of every item used and was time to investigate, so he chose two of his more popular designs, the entry-level Fido's Favorite and Depot would then deliver the order on Friday, When the more upscale Charlie's Castle. He met with his there was a shortage of a critical item, Denise often various employees to discuss potential causes of in- found herself driving to the Home Depot, buying the ventory problems with these two products, necessary item, and carrying it back to work in the back of her pickup truck. Because Doug's did $1.5 CHAPTER 7. Dependent Demand Inventory 277 million worth of business with Home Depot per year, it had negotiated a contract that provided the com- pany with a 10 percent discount off the normal, walk- up price. QUESTIONS 3. Discuss how Doug should go about implementing MRP. What type of training should he provide? What kind of software and equipment? How long should he allow for the implementation? 4. A business consultant suggested that Doug's Dens build a master schedule at the subassembly level Cie., for the floor, roof, and frame assemblies) rather than at the finished product level (I.e., Fido's Favorite and Charlie's Castle). The consul- tant said that this is the approach used by Dell (Doug idolizes Michael Dell as a role model). Dis. cuss whether this approach makes sense and ex- plain why or why not. 1. Is Doug's Dens a business that can effectively utilize MRP for planning its inventory? Why or why not? 2. Develop a material requirements plan for the next 8 weeks using the information in Table 7.25 and, on the next page, Table 7.26 and Figure 7.18. TABLE 7.25 Master Schedule Month Week 1 1 Fido's Favorite Charlie's Castle 4 3 2 5 3 3 3 2 3 5 4 4 4 5 2 2 6 2 PART II Tools and Tactical issues 7 3 3 3 8 15 12 3 8 10 4 10 8 5 10 20 6 9 15 7 9 12 8 8 10 9 8 12 10 10 10 11 11 10 12 278 PART II Tools and Tactical Issues TABLE 7.26 Current Ordering Policy for Doug's Dens Part/Subassembly Order Quantity/Reorder Point Corner brackets Q = 1,000; R = 500 6-foot 2 x 4 Q = 4,000; R = 1,000 2-inch nails Q = 10,000; R = 1,000 Fido's Favorite BASIC floor sub-assembly Frame sub-assembly BASIC roof sub-assembly 8 corner brackets 24 2-inch nails 12 6-foot 2 x 4's Charlie's Castle DELUXE floor sub-assembly Frame sub-assembly DELUXE roof sub-assembly 8 comer brackets 24 2-inch nails 12 6-foot 2 x 4's FIGURE 7.18 Partial BOM for Fido's Favorite and Charlie's Castle Ch Case ata BE Share Data Review View Tell me Formulas Insert Draw Page Layout dose ev We 28-O. General - A A Delete Ideas Cal Body $% th Conditional Format Forming as Table Styles Select Q 0 M P N 5 T R G 1 1 FAZO B 60 Stock 100 Stock D LT-0 2 3 SO 30 E F LAL 4 5 VO 40 LT. 2 3 30 20 LAL 4 5 50 40 6 20 1 30 2 7 f Fide's Favorite (BASIC) Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release 8 40 7 20 6 60 1 60 8 40 7 301 8 8 8 Charlie's Castle (DELUXE) Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release 301 0 10 60 D 40 0 0 20 20 0 30 30 0 40 40 0 60 60 O 30 30 0 40 40 ol 40 40 0 20 20 O 20 20 D 20 20 SO 40 LT weeks LT-1 week LAL 3 20 FOQ-50 3 4 20 30 6 20 1 o 2 0 4 50 5 40 8 40 2 0 7 20 5 40 8 40 6 60 7 10 Bask floor Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release Deluxe Floor Week Gross requirements Scheduled receipts Planned OM Inventory Planned receipts Planned Order release 0 -20 -90 -110 0 0 50 0 -150 0 220 0 0 0 0 o 20 0 -70 -110 -130 -150-190 0 0 0 0 go LT-Oweeks L4L LTO weeks 1 5 1 L4L 3 20 6 60 2 ol 5 40 7 30 2 0 8 40 61 20 4 50 7 20 B 40 40 0 201 30 Basic Roof Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release Deluxe Roof Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release Foto -20 0 0 ol ol 20 0 -50 0 -90 ol -150 0 180 0 -220 0 0 ol -70 -110 130 -150 -190 0 0 0 ol LT-1 week 1 0 6 FOQ50 3 4 40 80 2 0 5 80 7 50 80 80 Framewb-assemblies Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release O 200 40 0 -120 0 -280 0 330 0 410 0 0 1001000 + REU Chz CaseData Draw Home Page Layout Formulas Data Review View Tell me General X Calibri (Bodyl 28-04 - A A WE Delete Conditional Format Call Formatting an obte Styles Find Select B TV T7 Xfx a E R L M N G T O H U P 1 B 1 C F 5 A LT-week 2 1 O 3 0 FOQ-1000 4 0 5 0 6 0 71 0 0 34 Corner Brackets (8 per) 35 Week 36 Gross requirements 37 Scheduled receipts 38 Planned OH Inventory 39 Manned receipts 40 Planned Order release 0 0 0 0 0 0 0 ol 0 0 0 0 0 O 0 LT-Oweek 1 0 71 2 0 FOQ-5000 4 0 3 0 5 0 6 0 8 0 O o 0 0 0 0 O 0 D O O 0 0 0 LT-1 week LT-1 week 42 Nails (24 per 43 Week 44 Gross requirements 45 Scheduled receipts 46 Panned OH Inventory 47 Planned receipts 48 Planned Order release 49 50 24 (12 per 51 Week 52 Gross requirements 53 Scheduled receipts 54 Planned OH Inventory 55 Planned receipts 56 Planned Order release 57 58 59 FOQ800 4 FOQ - 400 3 1 21 3 5 4 6 6 O 7 0 1 0 2 0 S 0 7 0 8 0 O 0 QUESTION 2 24 (12 per Week Gross requirements Scheduled receipts Planned OH inventory Planned receipts Planned Order release O 0 0 o 0 O ol o 0 0 0 0 0 0 0 0 0 0 0 O ol 0 0 0 0 O 0 LT-1 week 14L 4 1 0 2 ol 3 0 5 0 7 0 O 0 0 2.4 (12 per Week Gross requirements Scheduled receipts Planned OH Inventory Planned receipts Planned Order release 62 0 0 0 0 0 o ol D o 0 O 0 0 ol 65 66 Case MacBook Air AutoSave OFF Ch7_CaseDocument (1) - Compatibility Mode-Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Tell me 21 5 Aa Bbc dee Aalb Cedte AaB Times New... 12 ' Aav A BI web x x ADA Paste Normal No Spacing v Hear CHAPTER 7 CASE ANALYSIS QUESTIONS- USE THE TEMPLATE Doug's Dens doghouses have become wildly popular. In fact, demand has increased to the values below. Revised Master Schedule for Deup's Dens Week 1 2 3 4 5 6 7 8 Fido's Favorite 40 50 30 30 40 60 30 40 Charlie's Castle 30 30 20 50 40 20 20 40 Because of product returns and other factors, there is a current on-hand balance of 100 and 60 units for Fido's Favorite and Charlie's Castle, respectively. To increase efficiency, Doug's has started producing basic floor and frame subassemblies in batches of 50. Due to larger volume production, lead times have increased to 1 week for basic floor subassemblies and frame subassemblies. Doug's has started purchasing comer brackets in quantities of 1000, nails in quantities of 5000, and 2x4's in quantities of 800 in order to obtain better pricing. The lead-time for 2x4's has gone to 1 week. Figure 7.18 (p. 278) is necessary to develop the material plan EXCEL ANALYSIS 1. Develop a material plan for Doug's Dens, including: Fido's Favorite Charlie's Castle BASIC floor sub-assembly (I per Fido) BASIC roof sub-assembly (1 per Fido) DELUX floor sub-assembly (per Charlie) DELUXE roof subassembly (I per Charlie) Frame sub-assembly (I per Fido and I per Charlie) Corner brackets (8 per Frame subassembly) 2-Inch Nails (24 per Frame sub-assembly) 6-foot 2x4's (12 per Frame sub-assembly) 2. Doug's is concerned about carrying costs (physical storage, potential for damage, and cost of capital) for 2x4's. Compare the average inventory of 2x4's with a lot size of 800 versus a lot for lot policy and a lot size of 400 Write-up will include the background, have the 10 MRP records and an explanation of what you did for each as your analysis and final values as the recommendations. YOU SHOULD HAVE 10 MRP RECORDS 2 mere for 12) (example below) Fide's Favorite-141 100 hand Week 1 2 3 4 5 6 7 8 Gross requirements 40 500 1000 1040 Scheduled receipts Planned OH ventory 60 10 0 0 0 0 0 Planned receipts 203040601040 Planned Order release 2014040
