Evaluating MRP Development, Supplier Delays, Capacity Feasibility, and Optimization Strategies in Production Planning

Questions

Casual Furniture Company

1. Develop the MRP for all of the components.

2. During week 1 of the plan, the bracket supplier notifies CFC that the order for 600 units will not arrive as planned. Instead, 300 will arrive this week and 300 will arrive next week, instead of all 600 arriving at the same time. Will this affect production and, if so, to what extent?

3. Now that the plan has been developed, is it feasible to consider the capacity of the cutting department? What recommendations do you have?

4. If you could change the lead times or lot-sizing policies used for any of the components, what changes would you make? Why?

BOM, MPS, & Lot Sizing

Ch. 14 Case (Casual Furniture)

Casual Furniture Company Case
MPS
	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Bookshelf 4 x 3-01 BOM	70	70	80	90	60	80	80	70
MRP Record	Part Name: Bookshelf 4 x 3-01
Lot Size Rule: L4L Lead Time: 0 Available Inventory: 0 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements	70	70	80	90	60	80	80	70
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record: 1 per book shelf	Part Name: Cabinet
Lot Size Rule: L4L Lead Time: 2 weeks Available Inventory: 120 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record: 1 per Cabinet	Part Name: Back
Lot Size Rule: L4L Lead Time: 1 week Available Inventory: 100 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record: 2 per Cabinet	Part Name: Side
Lot Size Rule: L4L Lead Time: 1 week Available Inventory: 200 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record: 2 per Cabinet	Part Name: End
Lot Size Rule: L4L Lead Time: 1 week Available Inventory: 200 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record: 3 per Bookshelf	Part Name: Shelf
Lot Size Rule: FOQ = 500 Lead Time: 1 week Available Inventory: 300 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record: 4 per Bookshelf	Part Name: Bracket
Lot Size Rule: FOQ = 600 Lead Time: 1 week Available Inventory: 0 Safety Stock: 0	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
MRP Record 1 per Back, Side, End, & Shelf	Part Name: Oak Sheet
Lot Size Rule: FOQ = 1,000 Lead Time: 2 week Available Inventory: 500 Safety Stock: 30	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Gross requirements
Scheduled receipts
Available inventory
Net requirements
Planned order receipts
Planned order releases
Gross requirements = the total amount of an end item that is required
Scheduled receipts = the quantity that has been ordered but not yet received
Net requirements = gross requirements minus the sum of scheduled receipts and available inventory at the end of the last period which is the inventory available at the start of the current period.
When safety stock is needed, the net requirements are calculated based on the gross requirements plus safety stock minus the sum of scheduled receipts and available inventory at the end of the last period (the starting inventory of current period). Of course, if the total of available inventory plus scheduled receipts is greater than the gross requirements, then the net requirements is zero.
Available inventory is the inventory quantity that is available at the end of a period (see equation 14.1).
Available inventory at the start of the period + scheduled receipts + planned order receipts – gross requirements
Planned order receipt = The amount that is planned to arrive at the beginning of a period.
Planned order release = The amount of an item that is planned to be ordered in a period.

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