It means therefore that, for every hour, overtime is paid at $11, for a whole week, there are 40-hours worked. This means that it costs $1 to hold all these components in the inventory per week. On the other hand, inventory costs include $0.25 to hold any part per week and it also costs $0.75 to hold the sub-assemblies in inventory per week. If he is paid $22 on normal working hours, it means, that during overtime, he is paid $11. For any overtime work, the machinist is paid a 50% premium. 3079 can be used to produce more final products to boost profits (Magee, 2010). To make good use of this, the over demanded quantity of part no. 435 must also increase, hence increasing the demand for the subassemblies used to produce the final product. 3079, it, therefore, means that the demand for the different subassemblies such as part no. For this problem, if the sub-assemblies of lot sizes 1,000 have produced a lumpy demand for part no. Therefore, to make the final product in week one To improve the over sub-assemblies in lot sizes of 1,000, the management can increase the demand for the final product so that, all the sub-assemblies produced can be used in the production of the final product (Gray, 2000).įor this matter, any week when sub-assemblies of lot sizes 1,000 are produced and the number is higher than the minimum required, the rest can be used for production in the next or the following week following the week in question. 435 and 257 were used in the subassemblies and part 3079 was also used in each sub-assemblies to make the final products. Using a lot size of 1,000 Using the master schedule, in week 1, 600 Gemini and 300 Saturn were made.
435 used in the Gemini TV stand and no.257 used in the Saturn Microwave. 3079 which is used in two subassemblies, no.
Space Age Furniture manufactures tables and cabinets to hold portable televisions and microwave ovens. MRP is also used to optimize the inventory costs in case the finished product is composed of several components. Read Space Age Furniture Company in Chapter 9 of your text. MRP was one of the earliest integrated information systems which dealt with improvements of productivity.The method of material requirement planning is used for dependent demand and for both the manufacturing and assemblies.
Solution Preview Materials Requirement Planning (MRP) is software used by manufacturing companies to control the planning and inventory system.
The lot size of 1,000 for sub-assemblies has produced a lumpy demand for part 3079.Develop an MRP for Space Age Furniture Company using the information in the case including the production of sub-assemblies in lot sizes of 1,000.Respond to the following and include any Materials Requirement Planning (MRP) calculations: Read “Space Age Furniture Company” in Chapter 9 of your text.