2. Using an order spike threshold value of 30 units, and your red, yellow, and green threshold values, fill in sales order threshold demand, qualified sales order demand, net flow position, and order quantity rows in Figure 9.14. In the planning priority row, categorize the planning priority as red, yellow, or green. Fast Cycles is a startup that makes an electric assist touring bicycle. The bike is designed to cruise at 30 mph and can travel 150 miles (or further with pedal assist) on a single battery charge. The rugged design has special shock absorbers on the front and rear that make for a comfortable ride on roads with tar strips, ruts and potholes. The company has had some complaints related to the 10 working days lead time that it currently offers customers.

We introduced the company in Chapter 8, Material Requirements Planning. In that version, standard MRP logic was used to plan the fabrication and assembly of the E-Bike. The 10 working days lead time was needed when using the system. The company is now interested in exploring the use of demand-driven material requirements planning (DDMRP) and determining how to ship a bike 3 days after it is ordered. To do this, Fast Cycles will implement a system where a small number of completed bikes are carried in inventory. DDMRP offers planning logic that will enable this improved customer service.

To review the Fast Cycles process, the frame of the bike is fabricated from aluminum tubes which are cut and welded together using special jigs in the factory. Other parts, such as the wheel/tire assembly, brakes, motor, battery, electronic controller, and drive mechanism, are purchased from vendors that specialize in these items.