MRP Exercises

Remark: In the exercises, unless stated otherwise, either the order quantity may be ordered,
or a multiple of this quantity. Note that if the order quantity is chosen equal to the EOQ, and
the EOQ is ordered more than once at the same time, the benefits of the EOQ are not
realized.

Exercise 1 (Lucky Lighting)

Lucky Lighting is a medium-sized company specialized in a broad variety of lamps for the car
industry. The company serves both auto parts stores and assembly plants of renowned car
brands like Volkswagen, Fiat, Ford and General Motors. Currently, its geographical focus is
primarily on the European market. Lucky Lighting’s most profitable products at the moment
are its front side lamp and headlamp for sedan models. The substantial demand for these
two lamp types has definitely benefited from the growth of the global car industry.

Unfortunately, Lucky Lighting currently faces severe problems in matching production and
demand, especially for the front side lamps. Despite heavy investments in a new MRP
system in 2016, there are still frequent problems in the supply chain of this specific lamp.
Confronted with these problems the company’s vice president (VP) of operations is seriously
considering to start working with safety stocks for the front side lamp’s key components.
Still, he first wants to analyze the current situation in more detail.

The (simplified) Bill of Materials for the front side lamp is shown below:

Front side lamp

Side lens Side frame subassembly

Side bulb Flasher bulb

Lucky Lighting’s VP of operations knows the following Master Production Schedule (MPS) for
the coming 8 weeks:

week 1 2 3 4 5 6 7 8
Number of front side 110 90 140 140 120 100 150 120
lamps

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If all required components are available at the beginning of the week, the assembly of the
front side lamp is possible in that same week. Some relevant data on the various lamp
components are summarized in the table on the next page.
In addition, Lucky Lighting’s VP of operations knows that scheduled receipts for the side
lenses (250 pieces) and the flasher bulbs (400 pieces) are due in week 1.

Component Order quantity Lead time (weeks) Inventory level

side lens 250 2 50
side frame 300 3 200
subassembly
side bulb 400 1 200
flasher bulb 400 2 25

a) Fill in the MRP tables in the attachment.

b) Answer the following questions:
1. What is the planned order release of the front side lamp unit in week 1?
2. What is the on-hand inventory of the side lens in week 3?
3. What is the on-hand inventory of the side frame subassembly module in week 3?
4. How much is the on-hand inventory of the side frame subassembly module in
week 5?
5. What are the gross requirements of the side bulb in week 4?
6. What is the on-hand inventory of the flasher bulb in week 2 and in week 6?
c) What problems do you see in the upcoming 8 weeks?

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Exercise 2 (WOODWRK)
The company WOODWRK manufactures bookshelves. Each bookshelf consists of a back
panel, two side panels, and 4 shelves. For additional strength, each side panel is made from
two separate multiplex panels that are glued together (afterwards, the side panel needs to
dry for a few days before it can be used).
Furthermore, the following data is known:

Component Order quantity/ Lead time (days) on-hand inventory

batch size
Bookshelf 20 2 3
Back panel 30 3 0
Side panel 50 2 20
Multiplex panel 75 1 5
Shelves 100 4 50

a) Draw the Bill of Materials for a bookshelf of WOODWRK.

b) WOODWRK receives two orders: 10 bookshelves need to be ready by week 6, and 15

bookshelves need to be delivered in week 8. At the current moment (time 0),
WOODWORK has 3 bookshelves in stock.
Fill in the MRP tables and then answer the questions.
1. What are the "gross requirements" of the back panel in week 8?
2. What is the "on-hand inventory" of the side panel in week 8?
3. How much is the "planned order release" for the multiplex panel in week 1?
4. What is the "on-hand inventory" of the shelves in week 4?

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Exercise 3 (CALCULIX)
The company CALCULIX manufactures calculators. Each calculator consists of a plastic front,
a plastic back, a screen, a circuit board, a set of keys, and a battery module. The battery
module consists of a battery and 2 clips (of the same type). Furthermore, the following data
is known:

Component Order quantity / Lead time (weeks) on-hand inventory

batch size
Calculator 100 1 200
Front 1000 2 200
Back 1000 3 0
Screen 500 3 250
Circuit board 250 1 20
Keys (set) 100 4 50
Battery module 150 1 80
Battery 200 3 40
Clip 400 1 300
An order for the screens is still on its way. In week 2, 500 screens will arrive.
a) Provide the so-called 'indented' Bill of Materials for a CALCULIX calculator. Complete
the table below.

Level Component Quantity

0 calculator
.1 front

b) CALCULIX receives two orders: 500 calculators need to be ready by week 5, and 350
calculators need to be delivered in week 7. At the current moment (time 0),
CALCULIX has 200 calculators in stock.
Fill in the MRP tables and then answer the questions below.
1. What are the "gross requirements" of the calculator in week 5?
2. What is the "on-hand inventory" of the battery in week 3?
3. How many times should an order be placed for the screen in this 8-week period?
4. What is the "planned order release" for the clip in week 4?

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Exercise 4 (DraftFree)
The company DraftFree specializes in draft strips. With the current
increase in demand for these products, several new draft strips have
been introduced with more emphasis on the appearance of the draft
strip. Additionally, a new supplier for the adhesive strip has been
sought. The previous type of adhesive strip no longer met DraftFree's
requirements. The new adhesive strip allows for adjusting the position
of the draft strip after attachment without damaging the adhesive
strip.
For production planning, DraftFree uses an MRP system. The following Master Production
Schedule (MPS) has been prepared for the draft strip for the next 8 weeks.
Period 1 2 3 4 5 6 7 8
Quantity 20 20 20 40 70 80 70 80
0

The (simplified) bill of materials for the draft strip is shown below.
Draft strip

Plastic profile Adhesive strip Draft brush cassette

Metal holder Brush

If all the required components are available at the beginning of the week, the assembly of
the draft strip is possible within the same week. Any number of draft strips can be
assembled per week; the assembly is not constrained by a fixed batch size. At the time of
planning, there are no draft strips in stock.
Furthermore, the following data is known:
Component Order quantity / Lead time (weeks) Inventory level
batch size
Adhesive strip 200 2 200
Plastic profile 500 2 200
Draft brush cassette 400 2 100
Metal holder 700 3 400
Brush 300 4 100

1. What is the "on-hand inventory" of the plastic profile in week 2?

2. What is the "on-hand inventory" of the draft brush cassette in week 7?
3. In which week is there a Planned Order Release for the metal holder?
4. How many times should an order be placed for the component brush in this 8-week
period?

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5. How high is the available inventory of the brush in week 6?

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Exercise 5 (BakeWithIt)
Due to the increasing name recognition through the television program
‘The Clothed Chef’, James Olive has launched a line has launched a new
line of of baking products. The baking line is already a reasonable
success. James has outsourced the production to the company
BakeWithIt. For production planning, BakeWithIt has been using an
MRP system for many years. For the next 8 weeks, the following Master
Production Schedule (MPS) has been prepared for one of the most
successful products, the whisk.

Period 1 2 3 4 5 6 7 8
Quantity 100 200 60 10 20 100 120 20

The (simplified) bill of materials for the whisk is shown below.:

Whisk

Plastic handle Whisk module

Wire loop (5 units) Loop holder

Furthermore, the following data is known:
Component Quantity/ batch size Lead time (weeks) Inventory level
Whisk 50 1 100
Plastic handle 500 2 400
Whisk module 300 1 200
Loop holder 150 3 400
Wire loop 1200 2 500

Complete the MRP tables and then answer the questions below.
1. What is the "on-hand inventory" of the plastic handle in week 5?
2. What are the "gross requirements" of the whisk module in week 5?
3. What is the "on-hand inventory" of the whisk module in week 6?
4. How much is the "planned order release" of the bracket holder in week 2?
5. What is the "on-hand inventory" of the wire loop in week 1?
6. What is the "planned order release" of the wire loop in week 3?

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MRP Tables

Exercise 1: Lucky Lighting

Table 1.1 Front side lamp (assembly lead time:….…., batch size:………….)
week 0 1 2 3 4 5 6 7 8
Gross requirement
To be received
On-hand inventory
Planned order
release
Table 1.2 Side lens (lead time:……………………., order quantity:…………………….)
week 0 1 2 3 4 5 6 7 8
Gross requirement
Scheduled receipts
On-hand inventory
Planned order
release
Table 1.3 Side frame subassembly (assembly lead time:………………., batch size:……………….)
week 0 1 2 3 4 5 6 7 8
Gross requirement
Scheduled receipts
On-hand inventory
Planned order
release
Table 1.4 Side bulb (lead time:………………., order quantity:……………….)
week 0 1 2 3 4 5 6 7 8
Gross requirement
Scheduled receipts
On-hand inventory
Planned order
release
Table 1.5 Flasher bulb (lead time:…………………., order quantity:…………….)
week 0 1 2 3 4 5 6 7 8
Gross requirement
Scheduled receipts
On-hand inventory
Planned order
release

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Exercise 2 WOODWRK
Table 2.1 Bookshelf

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 2.2 Back panel

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 2.3 Side panel

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 2.4 Multiplex panel

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 2.5 Shelf

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

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Exercise 3 CALCULIX
Table 3.1 Calculator

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 3.2 Screen

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 3.3 Battery module

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 3.4 Battery

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 3.5 Clip

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

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Exercise 4 DraftFree
Table 4.1 Draft strip
Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 4.2 Adhesive strip

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 4.3 Plastic profile

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 4.4 Draft strip cassette

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 4.5 Metal holder

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 4.6 Brush

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Exercise 5 BakeWithIt

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Table 5.1 Whisk

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 5.2 Plastic handle

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 5.3 Whisk module

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 5.4 Loop holder

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

Table 5.5 Loop wire

Week 0 1 2 3 4 5 6 7 8
Gross requirements
Scheduled receipts
On-hand inventory
Planned order release

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