BUS 375 - Assignment 8 Questions and Answers Rated A+

BUS 375 - Assignment 8 Questions and Answers Rated A+ MRP is generally applicable to items with independent demand. False Reduced inventory levels and faster response to changes in demand are both benefits of MRP. True Dependent demand and independent demand items differ in that: All of the above are true. A. The need for independent-demand items is forecasted. B. The need for dependent-demand items is calculated. C. For any product, all components are dependent-demand items. Which of the following is NOT a key benefit of MRP? Increased quality Lead times, inventory availability, and bills of material are among the five things operations managers must know for effective use of dependent inventory models. True A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? Planning Bill If the demand for product A is 50 units, how many units of component G will be needed? 100 as for making 1 unit of A ; number of unit of G required =2 hence for demand of A =50; number of G required =50*2 =100 By convention, what is the top level in a product structure? Level 0 If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90. True (MRP structure, easy) MRP is an excellent tool for scheduling components with variable lead times. False When safety stock is deemed absolutely necessary, the usual policy is to build it into (increase) the inventory requirements within the MRP logic. True What is the process of tracing upward in the bill of material from the component to the parent item in order to determine the cause for the component requirement? Pegging In MRP, system nervousness is caused by: management's attempt to continually respond to minor changes in production requirements. What is one of the tools that is particularly useful in reducing system nervousness in an MRP system? Time fences Distortion in MRP systems can be minimized when safety stock is held at the: Both A and C A. Purchased component or raw material level C. Finished goods level The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and setup cost is large compared to holding cost. False What lot-sizing technique is generally preferred when inventory holding costs are extremely high? lot-for-lot What does the POQ interval equal? EOQ / average demand per period Consider the following requirements for an office chair product. Week 1 2 3 4 5 6 Gross requirements 400 The company has a setup cost of $90, a holding cost per week of $5, beginning inventory of 300, and lead time of 2 weeks. What is the total inventory holding cost of using a lot-for-lot policy for this six-week inventory period? $1,500 There is on hand inventory of 300 units Week 1, will use 100 units of this inventory. So 200 remaining units will be carried to the next week. Holding cost for week 1 = 200 × 5 = $1,000 Week 2, will use 100 units out of 200, remaining will be 100 units. Holding cost for week 2 = 100×5=$500 Week 3 demand is 400 units so, 100 units of on hand inventory will be completely exhausted and orders will be placed according to net requirements. Total holding cost = $1000 from week 1 + $500 from week 2 = $1,500 Consider the following requirements for an office chair product. Week 1 2 3 4 5 6 Gross requirements 400 The company has a setup cost of $100, a holding cost per week of $5, beginning inventory of 100, and lead time of 1 week. If a lot-for-lot policy is used, what will be the total setup cost for this six-week inventory period? $400 As lot policy is L4L, every time there is requirement, orders needs to be placed equal to quantity of net requirement. Thus, there is no holding cost but huge ordering costs. Here Orders are placed 4 number of times. Also, as the beginning inventory is Thus, Total setup cost = Total ordering cost = 4*100 = 400 Consider the following requirements for an office chair product. Week 1 2 3 4 5 6 Gross requirements 400 The company has a setup cost of $90, a holding cost per week of $5, beginning inventory of 300, and lead time of 2 weeks. What is the total inventory cost (setup plus holding) of using a lot-for-lot policy for this six-week inventory period? $1,770 Inventory Holding Cost = 1500 Order/Set up Cost = 270 Total Inventory Cost = 1770 Smoothing a resource requirements profile to stay within capacity limits may increase setup costs. True You have developed the following simple product structure of items needed for your gift bag for a rush party for prospective pledges in your organization. You forecast 200 attendees. Assume that there is no inventory on hand of any of the items. Explode the bill of material. (Subscripts indicate the number of units required.) Item K: 200 units (200 x 1 = 200) Item L: 800 units (200 X 4 = 800) Item M: 400 units (200 X 2 = 400) You have developed the following simple product structure of items needed for your gift bag for a rush party for prospective pledges in your organization. You forecast 200 attendees. You are expected to have the gift bags ready at 5 P.M. However, you need to personalize the items (monogrammed pens, note pads, literature from the printer, etc.). The lead time is 1 hour to assemble 200 Js once the other items are prepared. The other items will take a while as well. Given the volunteers you have, the other time estimates are item K (2 hours), item L (1 hour), and item M (3 hours). Develop a time-phased assembly plan to prepare the gift bags. L (1 - 2) K (3 - 4) M (3 - 4) J (4 - 5) As the production planner for Xiangling Hu Products, Inc., you have been given a bill of material for a bracket that is made up of a base, 2 springs, and 4 clamps. The base is assembled from 1 clamp and 2 housings. Each clamp has 1 handle and 1 casting. Each housing has 2 bearings and 1 shaft. There is no inventory on hand. a) Design a product structure noting the quantities for each item and show the low-level coding. Match each number in the structure below with the corresponding item. I. Spring(2) II. Housing (2) III. Casting(1) IV. Shaft (1) As the production planner for Xiangling Hu Products, Inc., you have been given a bill of material for a bracket that is made up of a base, 2 springs, and 4 clamps. The base is assembled from 1 clamp and 2 housings. Each clamp has 1 handle and 1 casting. Each housing has 2 bearings and 1 shaft. There is no inventory on hand. b) Determine the gross quantities needed of each item if you are to assemble 50 brackets. Base: 50 units Spring: 100 units Clamp: 250 units Housing: 100 units Handle: 250 units Casting: 250 units Bearing: 200 units Shaft: 100 units As the production planner for Xiangling Hu Products, Inc., you have been given a bill of material for a bracket that is made up of a base, 2 springs, and 4 clamps. The base is assembled from 1 clamp and 2 housings. Each clamp has 1 handle and 1 casting. Each housing has 2 bearings and 1 shaft. There is no inventory on hand. c) Compute the net quantities needed if there are 25 of the base and 100 of the clamp in stock. With 25 bases and 100 clamps in stock ... Base = 50 - 25 = 25 Spring = 100 Clamp = 250 - 25 (due to fewer bases required) - 100 (due to clamps in stock) = 125 Housing = 100 - 2x25 (due to fewer bases required) = 50 Handle = 1x125 = 125 Casting = 1x125 = 125 Shaft = 2x50 = 100 Bearing = 1x50 = 50 The demand for subassembly S is 100 units in week 7. Each unit of S requires 1 unit of T and 2 units of U. Each unit of T requires 1 unit of V, 2 units of W, and 1 unit of X. Finally, each unit of U requires 2 units of Y and 3 units of Z. One firm manufactures all items. It takes 2 weeks to make S, 1 week to make T, 2 weeks to make U, 2 weeks to make V, 3 weeks to make W, 1 week to make X, 2 weeks to make Y, and 1 week to make Z. a) Choose the correct product structure. b) Choose the correct time-phased product structure. T(1) U(2) V(1) W(2) X(1) Y(2) Z(3) What is a lot-sizing technique that orders the quantity needed during a predetermined time between orders? POQ Which of the following statements is NOT true about the EOQ? The EOQ is preferable when dependent demand exists.