Chapter 13—Resource Management

11. 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?

12. 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?

13. 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?

14. A manufacturing company is trying to determine the best lot-sizing approach to take when developing an MRP schedule: lot?for?lot (LFL), fixed order quantity (FOQ) using the EOQ, or period 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:

Week	1	2	3	4	5	6
Net Requirements	100	400	200	350	600	50

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 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 POQ method?

h. What is the total cost for using the POQ approach?

15. A company that makes construction equipment is exploring different lot sizing approaches to its MRP schedule: lot for?lot (LFL), fixed order quantity (FOQ) using the EOQ, and period 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:

Week	1	2	3	4	5	6
Net Requirements	35	30	40	10	40	30

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 week5 using the FOQ approach?

e. What is the total cost using the FOQ method?

f. What is the period 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?

16. 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 period order quantity (POQ). The set?up 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 for the microcomputers for the next six weeks are:

Week	1	2	3	4	5	6
Net Requirements	150	200	50	300	250	100

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 period 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?

17. 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 period order quantity (POQ). They have the following information regarding the product they wish to produce:

Week	1	2	3	4	5	6
Net Requirements	50	40	60	30	50	30

Carrying costs = $1 per unit per week

Set?up 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 fixed order quantity (EOQ) 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 period order quantity (POQ)?

g. What is the ending inventory in week 4 using the POQ approach?

h. What is the total cost using the POQ method?

18. A sheet metal company has developed the following six-month production schedule (in thousands of square yards):

Week	1	2	3	4	5	6
Metal	150	100	175	200	160	160

In addition, their monthly labor and machine capacities (in hours) available, and the production standards (in hours per square yard) are:

	Labor	Machine
Capacity Available	16,000	20,000
Production Standard	.10	.18

a. What is the percent utilization of the labor capacity in month 4?

b. What is the percent utilization of the machine capacity in month 3?

c. In how many weeks are the labor requirements over capacity?

19. A special project in a manufacturing company has the following master production schedule (MPS) for the next eight weeks:

Week	1	2	3	4	5	6	7	8
Units	750	625	800	925	1000	900	675	675

The weekly fabrication and welding capacity (in hours) available and production standards (in hours per unit) are:

	Fabrication	Welding
Capacity Available	7,500	10,000
Production Standard	8	11

a. What is the percent utilization of the fabrication capacity in week 5?

b. What is the percent utilization of the welding capacity in week 2?

c. In how many weeks are the welding area requirements over capacity?

20. 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):

Month	1	2	3	4	5	6
Paint	130	150	170	160	160	120

The company's monthly labor and machine capacity available (in hours) and its production standards (in hours per gallon) are:

	Labor	Machine
Capacity available	15,000	23,000
Production Standard	.09	.12

a. What is the percent utilization of the labor capacity in week 4?

b. What is the percent utilization of the machine capacity in week 2?

c. In how many weeks are the machine requirements over capacity?