Reference no: EM13100940

Recently, Phil Harris, the Production Control Manager at Brunswick, read an article on Time-Phased Requirements Planning. He was curious about how this technique might work in scheduling Brunswick's engine assembly operations, and decided to prepare an example to illustrate the use to Time-Phased Requirements Planning.
Phil's first step was to prepare a master schedule for one of the engine types produced by Brunswick - the Model 1000 engine. This schedule indicates the number of units of the Model 1000 engine to be assembled each week during the past twelve weeks, and is shown below. Next, Phil decided to simplify his requirements planning example by considering only two of the many components that are needed to complete the assembly of the Model 1000 engine. These two components, the Gear Box and the Input Shaft, are shown in the Product Structure Diagram shown below. Phil noted that the Gear Box is assembled by the Sub-Assembly Department, and is subsequently sent to the main engine assembly line. The Input Shaft is one of several component parts manufactured by Brunswick that are needed to produce a Gear Box sub-assembly. Thus, levels 0, 1, and 2 are included in the Product Structure Diagram to indicate the three manufacturing stages that are involved in producing an engine: the Engine Assembly Department, the Sub-Assembly Department, and the Machine Shop.
The manufacturing lead times required to produce the Gear Box and Input Shaft components are also indicated in the Product Structure Diagram. Note that two weeks
are required to produce a batch of Gear Boxes, and that all of the Gear Boxes must be delivered to the assembly line parts stockroom before Monday morning of the week in which they are to be used. Likewise, it takes three weeks to produce a lot of Input Shafts, and all of the shafts that are needed for the production of Gear Boxes in a given week must be delivered to the Sub-Assembly Department stockroom before Monday morning of the week.
In preparing the MRP example Phil planned to use the attached worksheets, and to make the following assumptions:
1. Seventeen Gear Boxes are on hand at the beginning of week 1 and five Gear Boxes are currently on order to be delivered at the start of week 2.
2. Forty Input Shafts are on hand at the start of week 1 and twenty-two are scheduled for delivery at the beginning of week 2.

ASSIGNMENT:
1. Initially, assume that Phil wants to minimize his inventory requirements. Assume that each order will be only for what is required for a single period.
2. Phil would like to consider the costs that his accountants are currently using for inventory carrying and setup for the gear box and input shafts. These costs are as follows:
Part___________Cost
Gear Box Setup = $90/order
Inventory Carrying Cost = $2/unit/period
Input Shaft Setup = $45/order
Inventory Carrying Cost = $1/unit/period
3. Given the cost structure, determine a schedule that minimizes cost. (you will need to do an EOQ for the gear box and input shaft, then rerun the schedule. The demand of the gear box will be dependent upon the gross requirements of the Model 1000, and the EOQ of the input shaft will be dependent upon the gross requirements of the gear box that you used the EOQ in.)