Operations Management: MRP and MPS for Product K and its Components

This case study involves generating a Master Production Schedule (MPS) for Product K and Material Requirements Planning (MRP) worksheets for its components (A, B, C, and D). The BOM graph specifies the following requirements for Product K:

• 2 units of A are needed per K
• 5 units of B are needed per K
• 1 unit of B is needed per A
• 3 units of C are needed per A
• 2 units of D are needed per A

The demand for Product K is:

• 100 units needed in week 4
• 200 units needed in week 5
• 100 units needed in week 8

Product K has a lead time of one week and no inventory on hand. Lot for Lot order is used for Product K.

Component details are as follows:

• Component A: Lead time of 1 week, inventory of 100 units, minimum order of 250 units, Lot for Lot ordering, and safety stock of 50 units.
• Component B: Lead time of 1 week, inventory of 120 units, minimum order of 600 units, Lot size by 300 units, and safety stock of 0 units.
• Component C: Lead time of 1 week, inventory of 50 units, minimum order of 800 units, Lot for Lot ordering, and safety stock of 50 units.
• Component D: Lead time of 1 week, inventory of 100 units, minimum order of 400 units, Lot size by 400 units, and safety stock of 0 units.

MPS Worksheet for Product K

| Required Date | Order Release Date | Week 1 | Week 2 | Week 3 | Week 4 | Week 5 | Week 6 | Week 7 | Week 8 | |---------------|--------------------|--------|--------|--------|--------|--------|--------|--------|--------| | Week 1 | Week 1 | | | | 100 | | | | | | Week 2 | Week 2 | | | | | | | | | | Week 3 | Week 3 | | | | | | | | | | Week 4 | Week 4 | | | | | 200 | | | | | Week 5 | Week 5 | | | | | | | | | | Week 6 | Week 6 | | | | | | | | | | Week 7 | Week 7 | | | | | | | | | | Week 8 | Week 8 | | | | 100 | | | | |

MRP Worksheets for Components

MRP Worksheet for Component A

| Week | Gross Requirements | Projected On Hand | Net Requirements | Planned Order Receipt | Planned Order Release | |------|--------------------|-------------------|------------------|-----------------------|-----------------------| | 1 | 200 | 100 | 100 | 250 | 250 | | 2 | 0 | 150 | 0 | 0 | 0 | | 3 | 0 | 200 | 0 | 0 | 0 | | 4 | 200 | 50 | 150 | 250 | 250 | | 5 | 500 | 300 | 200 | 500 | 500 | | 6 | 0 | 350 | 0 | 0 | 0 | | 7 | 0 | 400 | 0 | 0 | 0 | | 8 | 200 | 150 | 50 | 250 | 250 |

MRP Worksheet for Component B

| Week | Gross Requirements | Projected On Hand | Net Requirements | Planned Order Receipt | Planned Order Release | |------|--------------------|-------------------|------------------|-----------------------|-----------------------| | 1 | 500 | 120 | 380 | 600 | 600 | | 2 | 0 | 420 | 0 | 0 | 0 | | 3 | 0 | 320 | 0 | 0 | 0 | | 4 | 1000 | 420 | 580 | 900 | 900 | | 5 | 2500 | 720 | 1780 | 2700 | 2700 | | 6 | 0 | 1020 | 0 | 0 | 0 | | 7 | 0 | 720 | 0 | 0 | 0 | | 8 | 500 | 420 | 80 | 900 | 900 |

MRP Worksheet for Component C

| Week | Gross Requirements | Projected On Hand | Net Requirements | Planned Order Receipt | Planned Order Release | |------|--------------------|-------------------|------------------|-----------------------|-----------------------| | 1 | 600 | 50 | 550 | 800 | 800 | | 2 | 0 | 750 | 0 | 0 | 0 | | 3 | 0 | 700 | 0 | 0 | 0 | | 4 | 300 | 550 | 250 | 800 | 800 | | 5 | 1500 | 700 | 800 | 1500 | 1500 | | 6 | 0 | 750 | 0 | 0 | 0 | | 7 | 0 | 700 | 0 | 0 | 0 | | 8 | 600 | 850 | 0 | 600 | 600 |

MRP Worksheet for Component D

| Week | Gross Requirements | Projected On Hand | Net Requirements | Planned Order Receipt | Planned Order Release | |------|--------------------|-------------------|------------------|-----------------------|-----------------------| | 1 | 400 | 100 | 300 | 400 | 400 | | 2 | 0 | 0 | 0 | 0 | 0 | | 3 | 0 | 0 | 0 | 0 | 0 | | 4 | 300 | 100 | 200 | 400 | 400 | | 5 | 800 | 400 | 400 | 800 | 800 | | 6 | 0 | 0 | 0 | 0 | 0 | | 7 | 0 | 0 | 0 | 0 | 0 | | 8 | 400 | 0 | 400 | 800 | 800 |