1) Complete the material requirements plan for an item X.

The
item has an independent demand and a safety stock of 40 is
maintained. Order quantity = 70, Lead time = 4 weeks, safety
stock = 40, Receipts for the 2nd week is 70. Stock on hand is 65.
The projected requirement for the weeks is given below.

Week 1 2 3 4 5 6 7 8 9 10 11 12
Projected 20 20 25 20 20 25 20 20 30 25 25 25
requirement

Solution: MRP for item X

Order Quantity = 70 WEEK

Lead Time = 4 weeks
Safety stock = 40
1 2 3 4 5 6 7 8 9 10 11 12
Projected 20 20 25 20 20 25 20 20 30 25 25 25
requirement
Receipts 70 70 70 70
Stock on hand (65) 45 95 70 50 100 75 55 105 75 50 95 70
25 30 35 25
Planned order 70 70 70
release
Period 1 = 65-20 = 45, Period 2 = 45-20 = 25, 45+70 -20 = 95, Period 3 = 95-25 = 70,
Period 4 = 70-20 = 50, Period 5 = 50-20 = 30, 50+70-20 = 100, Period 6 = 100-25 = 75,
Period 7 = 75-20 = 55, Period 8 = 55-20 =35, 55+70-20 = 105, Period 9 = 105-30 = 75,
Period 10 = 75-25 = 50, Period 11 = 50-25 = 25, 50+70-25 = 95, Period 12 = 95-25 =70
2) The fire extinguisher has a cylinder, a value assembly and 2
handle bars. Each valve assembly requires a valve and a valve
housing. The MPS for the fire extinguisher and the detailed bill
of materials is given in table 1 & 2 respectively.

Table 1 MPS Master Production Schedule

Week 1 2 3 4 5 6 7 8
Demand 100 - 150 140 200 140 - 300

Table 2 Details of bill of materials

Parts Economic No. of Lead time Stock on

required Order units (week) hand
quantity
Fire 300 1 1 150
extinguisher
Cylinder 450 1 2 350
Valve 400 1 1 325
assemblies
Valve 350 1 1 150
Valve 450 1 1 350
housing
Handle bars 700 2 1 650

Complete the material requirement plan for the fire

extinguisher, cylinder, valve assembly, valve, valve housing and
handle bars and show what quantities of orders must be
released and when they must be released in order to satisfy the
MPS.
 Solution:

Product Structure/BOM of Fire extinguisher:

Table 1 MRP calculation for the Fire extinguisher

Economic Order WEEK
Quantity = 300
Lead Time = 1
weeks 1 2 3 4 5 6 7 8

Projected 100 - 150 140 200 140 - 300

requirement
Receipts 300 300 300
Stock on hand 50 50 200 60 160 20 20 20
(150) (-100) (-140) (-280)
Planned order 300 300 300
release
On hand at end of period = On hand at end of previous period + Receipts Projected
requirement

Period 1 = 150-100 = 50, Period 2 = 50 (No requirement),

Period 3 = 50-150 = -100, 50+300 -150 = 200, Period 4 = 200-140 =60,

Period 5 = 60-200 = -140, 60+300-200 = 160, Period 6 = 160-140 = 20,

Period 7 = 20 (No requirement), Period 8 = 20-300 = -280, 20+300-300 = 20

 Table 2 MRP calculation for Cylinder
Economic Order WEEK
Quantity = 450
Lead Time = 2
weeks 1 2 3 4 5 6 7 8

Projected 300 300 300

requirement
Receipts 450 450
Stock on hand 350 50 50 200 200 200 350 350
(350) (-250) (-100)
Planned order 450 450
release

Table 3 MRP calculation for Valve assembly

Economic Order WEEK
Quantity = 400
Lead Time = 1
weeks 1 2 3 4 5 6 7 8

Projected 300 300 300

requirement
Receipts 400 400
Stock on hand 325 25 25 125 125 125 225 225
(325) (-275) (-175)
Planned order 400 400
release
 Table 4 MRP calculation for Valve
Economic Order WEEK
Quantity = 350
Lead Time = 1
weeks 1 2 3 4 5 6 7 8

Projected 400 400

requirement
Receipts 350 350
Stock on hand 150 150 100 100 100 50 50 50
(150) -250 -300
Planned order 350 350
release

Table 5 MRP calculation for Valve Housing

Economic Order WEEK
Quantity = 450
Lead Time = 1
weeks 1 2 3 4 5 6 7 8

Projected 400 400

requirement
Receipts 450
Stock on hand 350 350 400 400 400 0 0 0
(350) -50
Planned order 450
release
 Table 6 MRP calculation for Handle bar (2 quantity)
Economic Order WEEK
Quantity = 700
Lead Time = 1
weeks 1 2 3 4 5 6 7 8

Projected 300x 300x 300x

requirement 2= 2= 2=
600 600 600
Receipts 700 700
Stock on hand 650 50 50 150 150 150 250 250
(650) -550 -450
Planned order 700 700
release

Output: In order to satisfy the MPS.

Planned order release
Periods 1 2 3 4 5 6 7 8
Fire 300 300 300
extinguisher
Cylinder 450 450 300
Valve 400 400
assemblies
Valve 350 350
Valve 450
housing
Handle bars 700 700
3) A small-scale unit manufactures a product and it is expected to
supply 80 units in week 1, 120 in week 4, 120 in week 6, and
100 in week 8. Each product is made of 2 housing and one shaft
assembly. Each shaft assembly needs one wheel. For these
components order quantities, lead times and inventories on
hand at the beginning of period 1 are given below in table 1.

Table 1 Details of bill of materials

Parts required Order Lead time Inventory

quantity (week) on hand
Housing 600 2 200
Shaft 400 3 440
assemblies
Wheel 800 1 100

Apart from the above requirement, another 180 shaft assembly

required for another customer in week 5. 600 units of housing
are already scheduled to be received at the beginning of week
2. Complete the material requirement plan for housing, shaft
and wheel and show what quantities of orders must be
released and when they must be released in order to satisfy the
MPS.
 Solution:
Table MPS Master Production Schedule
Week 1 2 3 4 5 6 7 8
Demand 80 - - 120 - 120 - 100

Table 1 MRP calculation for component - Housing

(2 quantities)
Order Quantity = WEEK
600
Lead Time = 2
weeks 1 2 3 4 5 6 7 8

Projected 160 240 240 200

requirement
Receipts 600 600
Stock on hand 40 640 640 400 400 160 160 560
(200) -40
Planned order 600
release

Table 2 MRP calculation for component Shaft Assembly

Order Quantity = WEEK

400
Lead Time = 3
weeks 1 2 3 4 5 6 7 8

Projected 80 120 180 120 100

requirement
Receipts 400
Stock on hand 360 360 360 240 60 340 340 240
(440) -60
Planned order 400
release
 Table 3 MRP calculation for Sub component Wheel

Order Quantity = WEEK

800
Lead Time = 1
weeks 1 2 3 4 5 6 7 8

Projected 400
requirement
Receipts 800
Stock on hand 100 100 500 500 500 500 500 500
(100) -300
Planned order 800
release

Output: In order to satisfy the MPS.

Planned order release
Periods 1 2 3 4 5 6 7 8
Housing 600
Shaft 400
assemblies
Wheel 800