Question 1

A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Assuming a level production rate of 250 units per month, determine the month in which a backorder will materialize.

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Question 2

A hardware company is interested in developing a net requirement schedule for one of its products, a claw hammer. The beginning inventory for the product is 1500 units, and the safety stock is 300 units. The weekly demand over a six-week planning horizon is 400, 850, 560, 900, 600, and 700 units.
a.What would the net requirements be for Week 2?
b.What is the ending inventory in Week 4?

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Question 3

A company that makes construction equipment is exploring different lot sizing approaches to its master requirement planning (MRP) schedule: lot-for-lot (LFL), fixed-order quantity (FOQ) using the EOQ, and periodic-order quantity (POQ). It costs $100 to set up the production line to produce hydraulic jacks, and the carrying cost per unit per week is $1. Annual demand is expected to be 1550 jacks. For planning purposes, the company uses a 50-week work year and disregards the effects of initial inventory and safety stock. The net requirements for hydraulic jacks for the next six weeks are:
 $\begin{array}{|l|l|l|l|l|l|l|}
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Net Requirements } & 35 & 30 & 40 & 10 & 40 & 30 \
\hline
\end{array}$ 
a. Using a LFL approach, what is the lot size in week 3?
b. What is the total cost for the LFL method?
c. What is the fixed-order quantity (FOQ) using the EOQ approach?
d. What is the beginning inventory for week 5 using the FOQ approach?
e. What is the total cost using the FOQ method?
f. What is the periodic-order quantity?
g. What is the ending inventory for week 4 using the POQ method?
h. What is the total cost using the POQ approach?

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Question 4

A company assembles microcomputers for sale to computer stores. They are trying to decide which lot sizing approach to use for developing their MRP schedules: lot-for-lot (LFL), fixed-order quantity (FOQ) using the EOQ approach, or periodic-order quantity (POQ). The setup cost is $1000 per order, the inventory-carrying cost is $2.50 per week per unit, and the annual demand for the computers is 10,000 units. The company is using a 50-week work year and disregarding the effects of initial inventory and safety stock. The estimated net requirements ?? the microcomputers for the next six weeks are:
 $\begin{array}{|l|l|l|l|l|l|l|}
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Net Requirements } & 150 & 200 & 50 & 300 & 250 & 100 \
\hline
\end{array}$ 
a. Using the LFL method, what is the size of the production lot for Week 2?
b. What is the total cost using the LFL method?
c. What is the economic order quantity (EOQ)?
d. What is the ending inventory in Week 3 using the EOQ approach?
e. What is the total cost using the EOQ method?
f. What is the periodic-order quantity (POQ)?
g. What is the beginning inventory in Week 4 using the POQ approach?
h. What is the total cost using the POQ method?

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Question 5

Explain the three lot sizing methods, and under what circumstances each works best:
a.Lot-for-lot (LFL)
b.Fixed-order quantity (FOQ)
c.Periodic-order quantity (POQ)

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Question 6

A special project in a manufacturing company has the following master production schedule (MPS) for the next eight weeks:
 $$\begin{array} { | l | l | l | l | l | l | l | l | l | } 
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \
\hline \text { Units } & 750 & 625 & 800 & 925 & 1000 & 900 & 675 & 675 \
\hline
\end{array}$$ The weekly fabrication and welding capacity (in hours) available and production standards (in hours per unit) are:
 $\begin{array}{|l|l|l|}
\hline & \text { Fabrication } & \text { Welding } \
\hline \text { Capacity Available } & 7,500 & 10,000 \
\hline \text { Production Standard } & 8 & 11 \
\hline
\end{array}$ 
a.What is the percentage utilization of the fabrication capacity in Week 5?
b.What is the percentage utilization of the welding capacity in Week 2?
c.In which weeks are the welding area requirements over capacity?

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Question 7

A manufacturing company is trying to determine the best lot sizing approach to take when developing a market requirements planning (MRP) schedule: lot-for-lot (LFL), fixed-order quantity (FOQ) using the economic order quantity (EOQ), or periodic-order quantity (POQ). The ordering cost is $504 per order, the inventory-carrying cost is $1 per week per unit, and the annual demand for the product is 15,000 units. They are using a work schedule for a 50-week work year. They are disregarding the effects of initial inventory and safety stock at the present time. The estimated net requirements for their product for the next six weeks are:
 $\begin{array}{|l|l|l|l|l|l|l|}
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Net Requirements } & 100 & 400 & 200 & 350 & 600 & 50 \
\hline
\end{array}$ 
a. Using LFL, what is the size of the production lot in week 3?
b. Using LFL, what is the total cost for this method?
c. What is the EOQ needed?
d. What is the beginning inventory in week 4 using the FOQ method?
e. What is the total cost for using the FOQ approach?
f. What is the POQ size for production lots?
g. What is the ending inventory for week 5 using the POQ method?
h. What is the total cost using the POQ approach?

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Question 8

The Eugene plant of Basic Computers Inc. (BCI) wants to develop a net requirements schedule for one model of microcomputers. The beginning inventory is 500 units, and they like to carry 50 units as safety stock. The estimated demand for the next 6 weeks is 200, 250, 300, 375, 400, and 600 units.
a.What would the net requirements be for Week 3?
b.What is the beginning inventory in Week 5?

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Question 9

A company that makes inkjet printers is trying to determine a MRP schedule for the print cartridges it needs in its newest model of printer. They have gross requirements of 1000 units in week 2 and 900 units in week 4. The minimum lot size is 500 units and the lead time is 1 week. They currently have 300 units on hand that includes a safety stock of 150 and another 100 units already allocated. They have 500 units scheduled for receipt in week 1.
a.What is the number of units available in Week 1?
b.What is the planned order release in Week 3?

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Question 10

The Pacific Chemical Company produces high quality paint in Oregon for sale throughout the western U.S. The company ships paint in gallon containers. The production manager has developed the following master production schedule (MPS) for the next six months (data is in thousands of gallons):
 $\begin{array}{|l|l|l|l|l|l|l|}
\hline \text { Month } & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Paint } & 130 & 150 & 170 & 160 & 160 & 120 \
\hline
\end{array}$ The company's monthly labor and machine capacity available (in hours) and its production standards (in hours per gallon) are:
 $\begin{array}{|l|l|l|}
\hline & \text { Labor } & \text { Machine } \
\hline \text { Capacity available } & 15,000 & 23,000 \
\hline \text { Production Standard } & .09 & .12 \
\hline
\end{array}$ 
a.What is the percentage utilization of the labor capacity in Week 4?
b.What is the percentage utilization of the machine capacity in Week 2?
c.In which weeks are the machine requirements over capacity?

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Question 11

An electronics company wants to develop an MRP schedule for one of its key components, a specialized chip. The lot size is 600, the lead time is 2 weeks, there are 900 units on hand with 300 of those as safety stock and 500 already allocated. There are gross requirements for 2000 units in Week 3 and 1500 units in Week 5. There are 600 units scheduled to be received in Week 1.
a.What is the number of units available in Week 3?
b.What is the planned order receipt for Week 5?

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Question 12

It is time for a company to do its MRP schedule, but they aren't sure which lot sizing approach to use: lot-for-lot (LFL), fixed-order quantity (FOQ) using the EOQ approach, or periodic-order quantity (POQ). They have the following information regarding the product they wish to produce:
 $\begin{array}{|l|l|l|l|l|l|l|}
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Net Requirements } & 50 & 40 & 60 & 30 & 50 & 30 \
\hline
\end{array}$ Carrying costs = $1 per unit per week
Setup costs = $125
Annual demand = 2000 units
Work year = 50 weeks 
a. What is the production lot size for Week 2 using the LFL method?
b. What is the total cost using the LFL approach?
c. What is the FOQ using the EOQ approach?
d. What is the beginning inventory in Week 3 using the FOQ approach?
e. What is the total cost using the FOQ method?
f. What is the POQ?
g. What is the ending inventory in Week 4 using the POQ approach?
h. What is the total cost using the POQ method?

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Question 13

A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Determine the level production rate if a level strategy is selected with the goal of ending Period 4 with 100 units in inventory.

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Question 14

A sheet metal company has developed the following six-month production schedule (in thousands of square yards):
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Metal } & 150 & 100 & 175 & 200 & 160 & 160 \
\hline
\end{array}$$ In addition, their monthly labor and machine capacities (in hours) available, and the production standards (in hours per square yard) are:
 $\begin{array}{|l|l|l|}
\hline & \text { Labor } & \text { Machine } \
\hline \text { Capacity Available } & 16,000 & 20,000 \
\hline \text { Production Standard } & .10 & .18 \
\hline
\end{array}$ 
a.What is the percentage utilization of the labor capacity in month 4?
b.What is the percentage utilization of the machine capacity in month 3?
c.In which weeks are the labor requirements over capacity?

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Question 15

A company makes traffic signals for downtown streets. They are interested in developing a product structure tree for one of their traffic signal models. Each traffic signal is composed of a housing and bracket assembly. Each housing assembly is composed of optical and casing subassemblies. Each bracket assembly is composed of a hanger part and a wire outlet part. The optical subassembly is composed of 4 wire lead subassemblies, 3 lens parts, 3 bulbs, and 3 socket parts. Each casing subassembly is composed of 3 plastic molds and 3 hardware subassemblies. Each wire lead subassembly is made up of 1 conductor part, 1 insulation part, and 4 spade connector parts. Each hardware subassembly is made up of 4 nuts, 4 bolts, and 8 washers.
a.How many spade connectors are needed to make one traffic signal?
b.How many bolts are needed to make one traffic signal?

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Question 16

What is capacity requirements planning (CRP)?

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Question 17

What are the components of a materials requirements planning (MRP) record?

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Question 18

Given the information below, complete the materials requirements planning (MRP) record and explain what it tells the inventory analyst to do. $\begin{array}{|l|l|}
\hline \text { Lot Size Rule: Fixed Q }=200 \text { units } & \text { Safety Stock: 0 units } \
\hline \text { Lead Time }=2 \text { weeks } & \text { Current On-Hand Quantity }=100 \text { units } \
\hline
\end{array}$ $\begin{array}{|l|l|l|l|l|l|l|l|l|}
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \
\hline \text { Gross Requirement } & 50 & 100 & 60 & 0 & 0 & 50 & 90 & 200 \
\hline \text { Scheduled Receipts } & & 200 & & & & & & \
\hline \text { Projected On Hand 100 } & & & & & & & & \
\hline \text { Planned Receipts } & & & & & & & & \
\hline \text { Planned Order Release } & & & & & & & &\\hline 
\end{array}$

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Question 19

A manufacturing company is interested in making a product structure tree for one of its major products. They know that product A is made up of assemblies B, C, and D. Each B assembly is made up of one raw material F and 2 E parts. Each C assembly is composed of 2 G parts and one H subassembly. Each H subassembly is made up of 2 F raw materials, 2 I parts, and 2 J parts.
a.How many units of part G are needed to make one unit of product A?
b.How many units of raw material F are needed to make up one unit of product A?

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Question 20

The bill of materials (BOM) for Product X is shown below, followed by a table of inventory data. The master production schedule quantity calls for the completion of 300 Xs in Week 7. The lead time for the production of X is 2 weeks, and there are currently no units of X available.  $\begin{array}{|l|l|l|}
\hline \text { Data Category } & \text { C } & \text { D } \
\hline \text { Lot Sizing Rule } & \text { FOQ }=700 & \text { LFL } \
\hline \text { Lead Time } & 2 \text { weeks } & 1 \text { week } \
\hline \text { Scheduled Receipts } & 0 & 0 \
\hline \text { Beginning (On-Hand Inventory) } & 200 & 200 \
\hline
\end{array}$ 
a.When and what quantity will be the planned order release for Item C?
b.Determine the week and the quantity of the planned order release for Item D.

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Quiz 13: Resource Management

A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Assuming a level production rate of 250 units per month, determine the month in which a backorder will materialize.

Explain the three lot sizing methods, and under what circumstances each works best: a.Lot-for-lot (LFL) b.Fixed-order quantity (FOQ) c.Periodic-order quantity (POQ)

A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Determine the level production rate if a level strategy is selected with the goal of ending Period 4 with 100 units in inventory.

What is capacity requirements planning (CRP)?

What are the components of a materials requirements planning (MRP) record?