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Assume that Product Z is made up of two units of A and four units of B. A is made of three units of C and four units of D. D is made of two units of E. The lead time for Z is two weeks and for E the lead time is three weeks. The lead time for all other units is one week. The demand for Z is 100 units in Week 10 and 200 units in Week 14. The lot size for Z, A and C are Lot-for-Lot (LFL). The lot size for both D and E is 1000+ units. This means that each of these must be ordered in minimum quantities of 1,000 units. The lot size for B is 500+ units. For Z, A, C, and D, there are no units on hand, no safety stock, and no units allocated. Item E has 700 units on hand, with a safety stock of 200 units and no units allocated. Item B has 500 units on hand, 100 units of safety stock and 100 units already allocated. There are 100 units of Item C currently scheduled to arrive in Week 1 and 200 units of item D are scheduled to arrive in Week 1.

a) Prepare the product structure tree.

b) Develop an MRP schedule showing the gross and net requirements and the planned order receipts and releases for Product Z and each of its components.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9396109

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