Analytics Exercise: An MRP Explosion—Brunswick Motors Recently. Phil Harris. the production control manager at Brunswick. read an article on time-phased requirements pl ning. He was curious about how this technique might work in scheduling Brunswick's engine assembly operations and decided to prepare an example to illustrate the use of time: phased requirements planning. We Lypes produced by Brunswick: the Mele! 100 engine. This schedule indicates the number of units Model 1000 engine 10 be assembled eich week diving the bs 12 weeks and is shown om the next page. Nevt, Phil deci to simplify his requirements planning example by consideronly two of the Many Components that are needed to come plete the assembly of the Mode! 1000 engine, These two com. the gear box and the input shaft, are shown in the ‘oduct Structure diagram shown below, Phil noted that the gear box is assembled by the Subussembly Department and fubsequently is Sent (© the main engine assembly line. The jnput shaft is one of several component pats manufactured by Brunswick that are needed to produce a gear box subassem- by. Thus. levels 0, 1, and 2 are included in the product struc- ture diagram to indicate the three manufacturing stayes that ae involved in producing an engine: the ngine Assembly Department, the Subassembly Department, and the Machine Shop. The manufacturing lead times required to produce the gear box and input shatt components are also indicated in the product structure diagram. Note that to weeks are required to produce a batch of geur boxes and that all the gear boxes must be delivered to the assembly line parts stockroom be- fore Monday morning of the week in which they are to be used. Likewise, it takes three weeks to produce a Jot of input shafts. and all the shafts that are needed for the production of gear boxes in a given week must be delivered to the Sub- assembly Department stockroom before Monday morning of that week In preparing the MRP example Phil planned to use the worksheets shown on the next page and to make the follow- ing assumptions: 1 Seventeen gea Week |. and five gear boxes are currently on order 10 be delivered at the start of Week 2 iF boxes are on hand at the beginning of Model 1000 master schedule Eh — a 2 Forty input shafts are on hand at the start of Week 1, and 22 are scheduled for delivery atthe beginning of Week 2 7 Assignment 1 Initially, assame that Phil wants to minimize his in- Ventory requirements. Assume that each order will be ‘only for what is required for a single period. Using the following forms, calculate the net requirements and planned order releases for the gear boxes and input shafts, Assume that lot sizing is done using lot-for-lot Phil would like to consider the costs that his accoun- tants are currently using for inventory carrying and setup for the gear boxes and input shafts, These costs are as follow: Part Cost Gear Bor Setup = $90/order inventory carrying cast = $2/unit/week Input Shaft Setup = $48/order inventory carrying cost = SVunit/week Given the cost structure, evaluate the cost of the schedule from (1), Assume inventory is valued at the ich week, 3 Calculate a schedule using least-total-cost lot sizing. end of Whit are the savings with this new schedule? wa Jid2]2)4[slel7]s[o[ oi" | Demand | Ay: SET Lae 1s | 20] 10 a, 2 1000 product steucture Engine Crankease rev "Input shaft Lead time = 3 weeks Used: 2 per gear ox Lead time assembly bow = weeks per engineEngine assembly master schedule Week ga tose 7 = 8 10 12 Quantity sila Gear box requirements Week 21 3 4 o 6 di —7— I Gross requirements fee Scheduled receipts Projected available balance Net requirements Planned order release xs Input shaft requirements Week 3 4 3 ee ele 12 Gross requirements Scheduled receipts — Projected available balance : | Net requirements Planned order release