Question 12.SP.3: The product structure tree for end item E follows. The manag...
The product structure tree for end item E follows. The manager wants to know the material requirements for ordered part R that will be needed to complete 120 units of E by the start of week 5. Lead times for items are one week for level 0 items, one week for level 1 items, and two weeks for level 2 items. There is a scheduled receipt of 60 units of M at the start of week 2 and 100 units of R at the start of week 1. Lot-for-lot ordering is used.
A partial assembly-time chart that includes R and leads to completion of E by the start of week 5 looks like this:
The table entries are arrived at as follows:
Master schedule: 120 units of E to be available at the start of week 5.
Item E: Gross requirements equal the quantity specified in the master production schedule.
Since there is no on-hand inventory, net requirements also equal 120 units. Using lot-for-lot ordering, 120 units must be scheduled to be available at the start of week 5. Because there is a one-week lead time for assembly of Es, an order will need to be released (i.e., work started) at the beginning of week 4.
Item M: The gross requirements for M are three times the net requirements for E, because each E requires three Ms. These must be available at the start of week 4. The net requirements are 60 units fewer due to the 60 units expected to be on hand at that time. Hence, 300 additional units of M must be available at the start of week 4. With the one-week lead time, there must be an order release at the start of week 3.
Item R: Because each M requires two units of R, 600 Rs will be needed to assemble 300 units of M. However, 100 units will be on hand, so only 500 need to be ordered. Because there is a lead time of two weeks, the 500 Rs must be ordered at the start of week 1.
The master schedule for E and requirements plans for E, M, and R follow.
