Elsbeth Home Furnishing Ltd assembles dining room tables usi

Elsbeth Home Furnishing Ltd assembles dining room tables using bought-in parts of four legs and a top. These have lead times of 2 and 3 weeks respectively, and assembly takes a week. The company receive orders for 40 tables to be delivered in week 5 of a production period and 80 tables in week 7. There are current stocks of 4 complete tables, 80 legs and 44 tops. When should the company orcer parts?

Solution

Through MRP matrix, the order quantity and period can be determined as follows:

Period

1

2

3

4

5

6

7

Tables

Gross requirements

0

0

0

0

40

0

80

OH = 4

Scheduled receipts

LT = 1

Projected available balance

4

4

4

4

0

0

0

SS = 0

Net requirements

36

80

Q = L4L

Planned order receipts

36

80

Planned order releases

36

80

Table requires 1 unit of Top

1

2

3

4

5

6

7

TOP

Gross requirements

0

0

0

36

0

80

0

OH = 44

Scheduled receipts

LT = 3

Projected available balance

44

44

44

8

8

0

0

SS = 0

Net requirements

0

0

72

0

Q = L4L

Planned order receipts

0

0

72

0

Planned order releases

0

0

72

0

0

0

Table requires 4 units of legs

1

2

3

4

5

6

7

Leg

Gross requirements

0

0

0

144

0

320

0

OH = 80

Scheduled receipts

LT = 2

Projected available balance

80

80

80

0

0

0

SS = 0

Net requirements

64

320

Q = L4L

Planned order receipts

64

320

Planned order releases

TOP: Order 72 units in week 3

LEG: Order 64 and 320 units in weeks 2 and 4 respectively.

Formulas:

Net requirement = GR of week – projected on-hand of previous week – Scheduled Receipts of week

Projected on-hand = Projected on-hand of previous week + SR of week – GR of week + Planned order receipt (PORc) of week

Planned order receipt = Net requirement for Lot-to-lot size

Planned order releases (PORs) = Planned order receipts (PORc) time -phased by item lead time

Period		1	2	3	4	5	6	7
Tables	Gross requirements	0	0	0	0	40	0	80
OH = 4	Scheduled receipts
LT = 1	Projected available balance	4	4	4	4	0	0	0
SS = 0	Net requirements					36		80
Q = L4L	Planned order receipts					36		80
	Planned order releases				36		80
	Table requires 1 unit of Top	1	2	3	4	5	6	7
TOP	Gross requirements	0	0	0	36	0	80	0
OH = 44	Scheduled receipts
LT = 3	Projected available balance	44	44	44	8	8	0	0
SS = 0	Net requirements				0	0	72	0
Q = L4L	Planned order receipts				0	0	72	0
	Planned order releases	0	0	72		0	0	0
	Table requires 4 units of legs	1	2	3	4	5	6	7
Leg	Gross requirements	0	0	0	144	0	320	0
OH = 80	Scheduled receipts
LT = 2	Projected available balance	80	80	80	0	0	0
SS = 0	Net requirements				64		320
Q = L4L	Planned order receipts		64		320
	Planned order releases