Reference no: EM132239831
Schwing produces bicycles. Each bicycle requires two tires. Suppose that the relevant parameters (i.e., order cost, per-item cost, and per-item inventory cost) for the end-product bicycle are Ka = 9, ca = 4, and ha = 1; and the parameters for the tires are Kb = 18, cb = 1 and hb = 0.25. Suppose also that the demand (GR) for bicycles for 3 time buckets is given by D1 = 10, D2 = 10, D3 = 10. Assume that there is neither initial inventory nor scheduled receipts for either item. To simplify the problem, assume that the time required to produce both tires and bicycles is negligible, compared with the length of the time bucket—that is, assume the lead time is 0 time units.
(a) Considering only bicycles (and ignoring tires, for the moment), determine the complete MRP record which will yield the minimum total cost for the bicycles.
(b) Using the schedule for bicycles determined in part (a), determine the complete MRP record for tires which will yield the minimum total cost for the tires.
(c) If the ordering schedules obtained in parts (a) and (b) are implemented, then determine the overall total cost.
(d) Do the above determined schedules for bicycles and tires minimize the overall total cost? If not, determine a better overall schedule.