Chapter 15 -

Resource
Planning

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Demand Patterns

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 Demand Patterns
2000 — 2000 —

1500 — 1500 —
Bicycles

Rims
1000 — 1000 —

500 — 500 —

| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Demand Patterns
2000 — 2000 —

1500 — 1500 —
Bicycles

Rims
1000 — 1000 —

500 — 500 —

Reorder point
| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Demand Patterns
2000 — 2000 —

Order
1500 — 1000 on 1500 —
day 3
Bicycles

Rims
1000 — 1000 —

500 — 500 —

Reorder point
| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
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 Demand Patterns
2000 — 2000 —

Order
1500 — 1000 on 1500 —
day 3
Bicycles

Rims
1000 — 1000 —

500 — 500 —

Reorder point
| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Demand Patterns
2000 — 2000 —

Order Order
1500 — 1000 on 1500 —
1000 on
day 3 day 8
Bicycles

Rims
1000 — 1000 —

500 — 500 —

Reorder point
| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Demand Patterns
2000 — 2000 —

Order Order
1500 — 1000 on 1500 —
1000 on
day 3 day 8
Bicycles

Rims
1000 — 1000 —

500 — 500 —

Reorder point
| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Demand Patterns
2000 — 2000 —

Order Order
1500 — 1000 on 1500 —
1000 on
day 3 day 8
Bicycles

Rims
1000 — 1000 —

500 — 500 —

Reorder point
| | | | | | | | | | | | | | | | | | | |
0 0
1 5 10 1 5 10
Day Day
(a) (b)
Figure 15.1
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Material Requirements
Plan Inputs

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Material Requirements
Plan Inputs

Engineering
Bills of
and process
materials
designs

Figure 15.2

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Material Requirements
Plan Inputs
Authorized Other
master production sources
schedule of demand

Engineering
Bills of
and process
materials
designs

Figure 15.2

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 Material Requirements
Plan Inputs
Authorized Other
master production sources
schedule of demand

Engineering
Inventory Inventory Bills of
and process
transactions records materials
designs

Figure 15.2

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 Material Requirements
Plan Explosion
Authorized Other
master production sources
schedule of demand

Engineering
Inventory Inventory MRP Bills of
and process
transactions records explosion materials
designs

Figure 15.2

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 Material Requirements
Plan Output
Authorized Other
master production sources
schedule of demand

Engineering
Inventory Inventory MRP Bills of
and process
transactions records explosion materials
designs

Material
requirements
plan
Figure 15.2

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Bill of Materials

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Bill of Materials

Back slats Seat cushion

Leg supports Seat-frame

boards

Back Front
legs legs A
Ladder-back
chair

Figure 15.3
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Bill of Materials
A
Ladder-back
chair

Back slats Seat cushion

B (1) C (1) D (2) E (4)
Ladder-back Seat Front Leg
subassembly subassembly legs supports

Leg supports Seat-frame

F (2) G (4) H (1) I (1) boards
Back Back Seat Seat
legs slats frame cushion
Back Front
legs legs A
Ladder-back
J (4) chair
Seat-frame
boards

Figure 15.3
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Master Production Schedule

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 Master Production Schedule
April May

1 2 3 4 5 6 7 8

Ladder-back chair 150 150

Kitchen chair 120 120

Desk chair 200 200 200 200

Aggregate
production plan 670 670
for chair family

Figure 15.4
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Inventory Record

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Inventory Record Figure 15.5

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37
inventory

Planned
receipts

Planned order
releases

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Inventory Record Figure 15.5

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37
inventory

Planned
receipts Explanation:
Gross requirements are the total demand for
Planned order
the two chairs. Projected on-hand inventory
releases
in week 1 is 37 + 230 – 150
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Inventory Record Figure 15.5

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117
inventory

Planned
receipts Explanation:
Gross requirements are the total demand for
Planned order
the two chairs. Projected on-hand inventory
releases
in week 1 is 37 + 230 – 150 = 117 units.
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Inventory Record Figure 15.6

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117
inventory

Planned
receipts

Planned order
releases

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Inventory Record Figure 15.5

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117
inventory

Planned
receipts Scheduled
Projected on-hand Inventory on Gross
or planned
inventory balance
Planned order = hand at end of + receipts in – requirements
releases at end of week t week t - 1
week t
in week t

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Inventory Record Figure 15.5

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 –3 –3 –153 –273 –273
inventory

Planned
receipts Scheduled
Projected on-hand Inventory on Gross
or planned
inventory balance
Planned order = hand at end of + receipts in – requirements
releases at end of week t week t - 1
week t
in week t

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Without a newSeat
Description: order in week 4,
subassembly Lead Time: 2 weeks
there will be a shortage of three
Week
units: 117 + 0 + 0 – 120 = – 3
units. 1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 –3 –3 –153 – 273 – 273
inventory

Planned
receipts

Planned order
releases

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Planned Orders Figure 15.6

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Adding the planned
Description: receipt
Seat subassembly Lead Time: 2 weeks
brings the balance to
Week
117 + 0 + 230 – 120 = 227 units.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227
inventory

Planned
230
receipts

Planned order
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Adding the planned
Description: receipt
Seat subassembly Lead Time: 2 weeks
brings the balance to
Week
117 + 0 + 230 – 120 = 227 units.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227
inventory

Planned
230
receipts

Planned order
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Offsetting for Seat
Description: a two-week lead time
subassembly Lead Time: 2 weeks
puts the corresponding planned
Week
order release back to week 2.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227
inventory

Planned
230
receipts

Planned order
230
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Offsetting for Seat
Description: a two-week lead time
subassembly Lead Time: 2 weeks
puts the corresponding planned
Week
order release back to week 2.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227
inventory

Planned
230
receipts

Planned order
230
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
TheDescription:
first planned
Seat order lasts
subassembly Lead Time: 2 weeks
until week 7, when projected
Week
inventory would drop to – 43.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227 227 77 –43
inventory

Planned
230
receipts

Planned order
230
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Adding the second
Description: planned
Seat subassembly Lead Time: 2 weeks
receipt brings the balance to
Week
77 + 0 + 230 – 120 = 187.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227 227 77
inventory

Planned
230 230
receipts

Planned order
230
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
Adding the second
Description: planned
Seat subassembly Lead Time: 2 weeks
receipt brings the balance to
Week
77 + 0 + 230 – 120 = 187.
1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227 227 77 187
inventory

Planned
230 230
receipts

Planned order
230
releases

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Planned Orders Figure 15.6

Explanation:
Item: C Lot Size: 230 units
TheDescription:
corresponding planned
Seat subassembly Lead Time: 2 weeks
order release is for week 5.
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227 227 77 187
inventory

Planned
230 230
receipts

Planned order
230 230
releases

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Planned Orders Figure 15.6

Item: C Lot Size: 230 units

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227 227 77 187 187
inventory

Planned
230 230
receipts

Planned order
230 230
releases

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Lot-Sizing Rules

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Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

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Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

POQ Gross
Description: Seat requirements
subassembly Lead Time: 2 weeks
Inventory at
lot = for weeks – end of week 3
size 4, 5, and 6 Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

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Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0 + 150)
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0 + 150) – 117
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0 + 150) – 117 = 153 units
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
153
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0 + 150) – 117 = 153 units
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
153
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0 + 150) – 117 = 153 units
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 150
inventory

Planned
153
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0 + 150) – 117 = 153 units
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 150
inventory

Planned
153
receipts

Planned order
153
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks
(120 + 0) – 0 = 120 units
Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 150 150 0 0 0
inventory

Planned
153 120
receipts

Planned order
153 120
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

Item: C Lot Size: P = 3

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 150 150 0 0 0
inventory

Planned
153 120
receipts

Planned order
153 120
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules — POQ Figure 15.7

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules

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Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

L4L
Description:Gross
Seat subassembly Lead Time: 2 weeks
lot = requirements
in week 4 – Inventory balance
at end of week 3
size Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

L4L
Description: Seat subassembly Lead Time: 2 weeks
lot = 120 – 117 = 3
size Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

L4L
Description: Seat subassembly Lead Time: 2 weeks
lot = 120 – 117 = 3
size Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117
inventory

Planned
3
receipts

Planned order
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

L4L
Description: Seat subassembly Lead Time: 2 weeks
lot = 120 – 117 = 3
size Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 0
inventory

Planned
3
receipts

Planned order
3
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 0 0 0
inventory

Planned
3
receipts

Planned order
3
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 0 0 0
inventory

Planned
3 150
receipts

Planned order
3 150
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 0 0 0 0
inventory

Planned
3 150 120
receipts

Planned order
3 150 120
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

Item: C Lot Size: L4L

Description: Seat subassembly Lead Time: 2 weeks

Week

1 2 3 4 5 6 7 8

Gross
requirements 150 120 150 120

Scheduled
receipts 230

Projected
on-hand 37 117 117 117 0 0 0 0 0
inventory

Planned
3 150 120
receipts

Planned order
3 150 120
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rules—L4L Figure 15.8

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Lot-Sizing Rule Comparison
 The FOQ rule generates high average
inventory because it creates remnants.
 The POQ rule reduces
average on-hand inventory
because it does a better
job of matching order
quantity to requirements.
 The L4L rule minimizes
inventory investment
but maximizes the number of orders placed.
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Safety Stock

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Safety Stock Figure 15.9

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Outputs

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Outputs
MRP
explosion

Figure 15.10

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Outputs
MRP
explosion

Material requirements plan

Action notices Priority reports Capacity reports
 Releasing new orders  Dispatch lists  Capacity requirements planning
 Adjusting due dates  Supplier schedules  Finite capacity scheduling
 Input-output control

Figure 15.10

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Outputs
MRP
explosion

Material requirements plan

Action notices Priority reports Capacity reports
 Releasing new orders  Dispatch lists  Capacity requirements planning
 Adjusting due dates  Supplier schedules  Finite capacity scheduling
 Input-output control
Routings
and time
standards

Figure 15.10

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Outputs
MRP
explosion

Material requirements plan

Action notices Priority reports Capacity reports
 Releasing new orders  Dispatch lists  Capacity requirements planning
 Adjusting due dates  Supplier schedules  Finite capacity scheduling
 Input-output control
Routings
and time
standards

Manufacturing resources plan

Performance reports

Figure 15.10

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Outputs
MRP
explosion

Material requirements plan

Action notices Priority reports Capacity reports
 Releasing new orders  Dispatch lists  Capacity requirements planning
 Adjusting due dates  Supplier schedules  Finite capacity scheduling
 Input-output control
Routings
and time
standards

Manufacturing resources plan

Cost and
Performance reports
price data

Figure 15.10

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Materials

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Materials
C (1)
Seat
subassembly

H (1) I (1)
Seat Seat
frame cushion

J (4)
Seat-frame
Figure 15.11 boards

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP Explosion

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion
Item: Seat subassembly
Lot size: 230 units

Week
Lead
time: 2 weeks 1 2 3 4 5 6 7 8

Gross
requirements 150 0 0 120 0 150 120 0

Scheduled
receipts 230 0 0 0 0 0 0 0

Projected
on-hand 37 117 117 117 227 227 77 187 187
inventory

Planned
230 230
receipts

Planned order
230 230
releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion Item: Seat subassembly
Lot size: 230 units

Week
Lead
time: 2 weeks 1 2 3 4 5 6 7 8

Gross
150 0 0 120 0 150 120 0
requirements

Planned
230 230
receipts

Planned
order 230 230
releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion Item: Seat subassembly
Lot size: 230 units

Week
Lead
time: 2 weeks 1 2 3 4 5 6 7 8

Gross
150 0 0 120 0 150 120 0
requirements

Planned
230 230
receipts

Planned
order 230 230
releases

Item: Seat frames Item: Seat cushion

Lot size: 300 units Lot size: L4L

Week Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
requirements requirements

Scheduled Scheduled
0 300 0 0 0 0 0 0 0 0 0 0 0 0 0 0
receipts receipts

Projected Projected
on-hand 40 on-hand 0
inventory inventory

Planned Planned
receipts receipts

Planned Planned
order order
releases releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion Item: Seat subassembly
Lot size: 230 units

Week
Lead
time: 2 weeks 1 2 3 4 5 6 7 8

Gross
150 0 0 120 0 150 120 0
requirements

Planned
230 230
receipts

Planned
order 230 230
releases

Usage quantity: 1 Usage quantity: 1

Item: Seat frames Item: Seat cushion
Lot size: 300 units Lot size: L4L

Week Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 230
requirements requirements

Scheduled Scheduled
0 300 0 0 0 0 0 0 0 0 0 0 0 0 0 0
receipts receipts

Projected Projected
on-hand 40 on-hand 0
inventory inventory

Planned Planned
receipts receipts

Planned Planned
order order
releases releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion Item: Seat subassembly
Lot size: 230 units

Week
Lead
time: 2 weeks 1 2 3 4 5 6 7 8

Gross
150 0 0 120 0 150 120 0
requirements

Planned
230 230
receipts

Planned
order 230 230
releases

Usage quantity: 1 Usage quantity: 1

Item: Seat frames Item: Seat cushion
Lot size: 300 units Lot size: L4L

Week Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 0 230 0 230 0 0 230
requirements requirements

Scheduled Scheduled
0 300 0 0 0 0 0 0 0 0 0 0 0 0 0 0
receipts receipts

Projected Projected
on-hand 40 on-hand 0
inventory inventory

Planned Planned
receipts receipts

Planned Planned
order order
releases releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion Item: Seat subassembly
Lot size: 230 units

Week
Lead
time: 2 weeks 1 2 3 4 5 6 7 8

Gross
150 0 0 120 0 150 120 0
requirements

Planned
230 230
receipts

Planned
order 230 230
releases

Item: Seat frames Item: Seat cushion

Lot size: 300 units Lot size: L4L

Week Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 0 230 0 0 0 0 230 0 0 230 0 0 0
requirements requirements

Scheduled Scheduled
0 300 0 0 0 0 0 0 0 0 0 0 0 0 0 0
receipts receipts

Projected Projected
on-hand 40 40 110 110 110 180 180 180 180 on-hand 0 0 0 0 0 0 0 0 0
inventory inventory

Planned Planned
300 230 230
receipts receipts

Planned Planned
order 300 order 230 230
releases releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion
Item: Seat frames
Lot size: 300 units

Week
Item: Seat cushion
Lot size: L4L

Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 0 230 0 0 0 0 230 0 0 230 0 0 0
requirements requirements

Planned Planned
300 230 230
receipts receipts

Planned Planned
order 300 order 230 230
releases releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion
Item: Seat frames
Lot size: 300 units

Week
Item: Seat cushion
Lot size: L4L

Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 0 230 0 0 0 0 230 0 0 230 0 0 0
requirements requirements

Planned Planned
300 230 230
receipts receipts

Planned Planned
order 300 order 230 230
releases releases

Item: Seat-frame boards

Lot size: 1500 units

Week
Lead
time: 1 week 1 2 3 4 5 6 7 8

Gross
requirements

Scheduled
0 0 0 0 0 0 0 0
receipts

Projected
on-hand 200
inventory

Planned
receipts

Planned
order
releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion
Item: Seat frames
Lot size: 300 units

Week
Item: Seat cushion
Lot size: L4L

Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 0 230 0 0 0 0 230 0 0 230 0 0 0
requirements requirements

Planned Planned
300 230 230
receipts receipts

Planned Planned
order 300 order 230 230
releases releases

Usage quantity: 4
Item: Seat-frame boards
Lot size: 1500 units

Week
Lead
time: 1 week 1 2 3 4 5 6 7 8

Gross
0 0 0 1200 0 0 0 0
requirements

Scheduled
0 0 0 0 0 0 0 0
receipts

Projected
on-hand 200
inventory

Planned
receipts

Planned
order
releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 MRP Explosion
Item: Seat frames
Lot size: 300 units

Week
Item: Seat cushion
Lot size: L4L

Week
Lead Lead
time: 1 week 1 2 3 4 5 6 7 8 time: 1 week 1 2 3 4 5 6 7 8

Gross Gross
0 230 0 0 230 0 0 0 0 230 0 0 230 0 0 0
requirements requirements

Planned Planned
300 230 230
receipts receipts

Planned Planned
order 300 order 230 230
releases releases

Item: Seat-frame boards

Lot size: 1500 units

Week
Lead
time: 1 week 1 2 3 4 5 6 7 8

Gross
0 0 0 1200 0 0 0 0
requirements

Scheduled
0 0 0 0 0 0 0 0
receipts

Projected
on-hand 200 200 200 200 500 500 500 500 500
inventory

Planned
1500
receipts

Planned
order 1500
releases

Figure 15.12
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Action Notice

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Action Notice Figure 15.13

Item: Seat frame Lot size: 230 units

Lead time: 1 week

Week

1 2 3 4 5 6 7 8

Gross
requirements 230 230

Scheduled
receipts 300

Projected
on-hand 40 -190 110 110 110 280 180 180 180
inventory

Planned
300
receipts

Planned order
300
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Action Notice Figure 15.13

Item: Seat frame Action to be taken: Lot size: 230 units

Lead
Stockout projected for week 1. time: 1 week
Reschedule open
Weekorder in week 2 to week 1.

1 2 3 4 5 6 7 8

Gross
requirements 230 230

Scheduled
receipts 300

Projected
on-hand 40 -190 110 110 110 280 180 180 180
inventory

Planned
300
receipts

Planned order
300
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Capacity Requirements

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Capacity Requirements
Date: Week: 32
Plant 01 Dept. 03: Lathe Station
Capacity: 320 hours per week

Week

32 33 34 35 36 37

Planned hours 90 156 349 210 360 280

Actual hours

Total hours

Figure 15.14

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Capacity Requirements
Date: Week: 32
Plant 01 Dept. 03: Lathe Station
Capacity: 320 hours per week

Week

32 33 34 35 36 37

Planned hours 90 156 349 210 360 280

Actual hours 210 104 41 0 0 0

Total hours

Figure 15.14

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Capacity Requirements
Date: Week: 32
Plant 01 Dept. 03: Lathe Station
Capacity: 320 hours per week

Week

32 33 34 35 36 37

Planned hours 90 156 349 210 360 280

Actual hours 210 104 41 0 0 0

Total hours 300 260 390 210 360 280

Figure 15.14

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Capacity Requirements
Date: Week: 32
Plant 01 Dept. 03: Lathe Station
Capacity: 320 hours per week

Week

32 33 34 35 36 37

Planned hours 90 156 349 210 360 280

Actual hours 210 104 41 0 0 0

Total hours 300 260 390 210 360 280 Explanation:

Projected capacity
requirements exceed
weekly hours of
capacity.
Figure 15.14

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Input-Output Report

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Input-Output Report
Workstation: Rough Mill Week: 32
Tolerance:  25 hours

Week Ending

28 29 30 31 32

Inputs
Planned
Actual
Cumulative deviation

Outputs
Planned
Actual
Cumulative deviation

Figure 15.15

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Input-Output Report
Workstation: Rough Mill Week: 32
Tolerance:  25 hours

Week Ending

28 29 30 31 32

Inputs
Planned 160 155 170 160 165
Actual 145 160 168 177
Cumulative deviation – 15 – 10 – 12 +5

Outputs
Planned 170 170 160 160 160
Actual 165 165 150 148
Cumulative deviation – 5 –- 10 – 20 – 32

Figure 15.15

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Input-Output Report
Explanation:
Cumulative deviations
Workstation: Rough Mill Week: 32 between – 25 hours
Tolerance:  25 hours and + 25 hours are
allowed.

Week Ending

28 29 30 31 32

Inputs
Planned 160 155 170 160 165
Actual 145 160 168 177
Cumulative deviation – 15 – 10 – 12 +5

Outputs
Planned 170 170 160 160 160
Actual 165 165 150 148
Cumulative deviation –5 – 10 – 20 – 32

Figure 15.15

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Input-Output Report
Explanation:
Cumulative deviations
Workstation: Rough Mill Week: 32 between – 25 hours
Tolerance:  25 hours and + 25 hours are
allowed.

Week Ending

28 29 30 31 32

Inputs
Planned 160 155 170 160 165
Actual 145 160 168 177
Cumulative deviation – 15 – 10 – 12 +5
Explanation:
Cumulative deviation
Outputs exceeds lower tolerance
Planned 170 170 160 160 160 limit, indicating actual
Actual 165 165 150 148 hours of output have fallen
Cumulative deviation –5 – 10 – 20 – 32
too far below planned
hours of output and some
Figure 15.15 action is required.

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP II

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP II Figure 15.16

Customer orders Forecasts

Master production schedule

Bills of materials
MRP Inventory records
Routings
explosion Inventory transactions
Time standards

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP II Figure 15.16

Customer orders Forecasts

Master production schedule

Bills of materials
MRP Inventory records
Routings
explosion Inventory transactions
Time standards

Material requirements plan

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP II Figure 15.16

Customer orders Forecasts

Master production schedule

Bills of materials
MRP Inventory records
Routings
explosion Inventory transactions
Time standards

Material requirements plan

Cost and
Manufacturing resource plan
financial data

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
MRP II Figure 15.16

Customer orders Forecasts

Master production schedule

Bills of materials
MRP Inventory records
Routings
explosion Inventory transactions
Time standards

Material requirements plan

Cost and
Manufacturing resource plan
financial data

Financial/ Sales and Human

Purchasing Manufacturing
accounting marketing resource
reports reports
reports reports reports

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Distribution
Requirements Planning

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Distribution
Requirements Planning

Retail
stores

Figure 15.17
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Distribution
Requirements Planning

Retail
stores

Distribution
centers

Figure 15.17
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Distribution
Requirements Planning

Retail
stores

Distribution
centers

Plants

Figure 15.17
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Resources

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Resources Level 1
Discharge

Level 2
Intermediate care

Level 3
Postoperative care
(Step down)

Level 4
Postoperative care
(Intensive)

Level 5
Surgery

Level 6
Postoperative care
(Angiogram)

Level 7
Postoperative care
(Testing)

Figure 15.18 (a)

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Resources Level 1
Discharge

Level 2
Intermediate care
Level 6
Postoperative care
(Angiogram)
Level 3
Postoperative care
(Step down)

Level 4
Postoperative care
(Intensive)

Level 5
(b) Surgery

Level 6
Postoperative care
(Angiogram)

Level 7
Postoperative care
(Testing)

Figure 15.18 (a)

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Resources Level 1
Discharge

Level 2
Intermediate care
Level 6
Postoperative care
(Angiogram)
Level 3
Postoperative care
(Step down)

Level 4
Postoperative care
(Intensive)

Level 5
(b) Surgery

Level 6
Postoperative care
(Angiogram)

Level 7
Postoperative care
(Testing)

Figure 15.18 (a)

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Bill of Resources Level 1
Discharge

Level 2
Intermediate care
Level 6
Postoperative care
(Angiogram)
Level 3
Postoperative care
(Step down)

Level 4
Pharmacy
Nurse MD Therapy Bed Lab Kitchen Postoperative care
(10
(6 hr) (1 hr) (1 hr) (24 hr) (3 tests) (1 meal) (Intensive)
medicines)

Level 5
(b) Surgery

Level 6
Postoperative care
(Angiogram)

Level 7
Postoperative care
(Testing)

Figure 15.18 (a)

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Solved Problem 1
A

LT = 1

B (3) C (1)
LT = 2 LT = 3

D (1) E (2) F (1) D (1)

LT = 3 LT = 6 LT = 1 LT = 3

G (1)

LT = 3
Figure 15.19

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
 Solved Problem 2 A

LT = 2

B (1) C (2)

LT = 1 LT = 2

Inventory Record Data

D (1)
ITEM
DATA CATEGORY B C D
LT = 3
Lot-sizing rule POQ (P=3) L4L FOQ = 500 units
Lead time 1 week 2 weeks 3 weeks
Scheduled receipts None 200 (week 1) None
Beginning (on-hand) 20 0 425
inventory

Figure 15.20

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Solved Problem 2 Figure 15.21

Item: B Lot size: POQ (P = 3)

Description: Lead time: 1 week

Week

1 2 3 4 5 6 7 8 9 10

Gross
requirements 100 200 120 180 60

Scheduled
receipts

Projected
on-hand 20 20 200 200 0 0 240 60 0 0 0
inventory

Planned
280 360
receipts

Planned order
280 360
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Solved Problem 2 Figure 15.21

Item: C Lot size: L4L

Description: Lead time: 2 weeks

Week

1 2 3 4 5 6 7 8 9 10

Gross
requirements 200 400 240 360 120

Scheduled
receipts 200

Projected
on-hand 0 200 0 0 0 0 0 0 0 0 0
inventory

Planned
400 240 360 120
receipts

Planned order
400 240 360 120
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.
Solved Problem 2 Figure 15.21

Item: D Lot size: FOQ = 500 units

Description: Lead time: 3 weeks

Week

1 2 3 4 5 6 7 8 9 10

Gross
requirements 400 240 360 120

Scheduled
receipts

Projected
on-hand 425 425 25 25 285 425 305 305 305 360 305
inventory

Planned
500 500
receipts

Planned order
500 500
releases

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved.