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OM Chap 14

The document outlines the product structure and material requirements for a gift bag for a party with 200 attendees, detailing the quantities of various components needed. It also includes a breakdown of gross and net quantities for brackets, along with a time-phased product structure for casting. Additionally, it provides a cost analysis including setup, holding, and stockout costs, resulting in a total relevant cost of $1,075.

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11 views6 pages

OM Chap 14

The document outlines the product structure and material requirements for a gift bag for a party with 200 attendees, detailing the quantities of various components needed. It also includes a breakdown of gross and net quantities for brackets, along with a time-phased product structure for casting. Additionally, it provides a cost analysis including setup, holding, and stockout costs, resulting in a total relevant cost of $1,075.

Uploaded by

Hạnh Trương
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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14.

1
You have developed the following simple produ
ct structure of items needed for
your gift bag for a rush party for prosp
ective pledges in your organization. You
forecast 200 attendees. Assume that there is no inventory on hand o
f any of the items.
Explode the bill of material. (Subscripts indicate the
number of units required.)
Part K: 1 x number of Js = 1 x 200 = 200
Part L: 4 x number of Ks = 4 x 200 = 800
Part M: 2 x number of Js = 2 x 200 = 400
Thus, for 200 units of J, we need 200 units of K, 800 units of L, and 400 units of
M.

14.2.

a) Product Structure

b) Gross Quantities for 50 Brackets:

● Base: 50
● Clamp: 250
● Handle: 250
● Casting: 250
● Housing: 100
● Bearing: 200
● Shaft: 100
● Spring: 100

c) Net Quantities (with 25 Base and 100 Clamp in stock):

● Base: 25 (net usage, but no production needed since in stock)


● Clamp: 150 (net to produce)
● Handle: 175
● Casting: 175
● Housing: 50
● Bearing: 100
● Shaft: 50
● Spring: 100 (no inventory, so gross = net)
14.4

a) The time-phased product structure for the bracket is attached as a document.

b) The casting will start on week 5 and week 9.


14.5
a)
b)

14.22
Gross Beginni Net Order Order Ending
Req. ng Inv. Req. Receipt Release Inv.

1 30 40 0 0 0 10

2 40 10 30 30 30 0
(Period
1)

3 30 0 30 30 30 0
(Period
2)

4 70 0 70 70 70 0
(Period
3)

5 20 0 20 20 20 0
(Period
4)

6 10 0 10 10 10 0
(Period
5)

7 80 0 80 80 80 0
(Period
6)

8 50 0 50 50 50 0
(Period
7)

Order Release is placed in the prior period (lead time = 1 week).

Ending Inventory = Beginning Inv. + Order Receipt − Gross Req.


Setup Costs:

○ Each order incurs $150.


○ Orders are placed in Periods 1, 2, 3, 4, 5, 6, 7 (total 7 orders).
○ Total Setup Cost = 7 × $150 = $1,050.

Holding Costs:

○ Inventory is held only in Period 1 (10 units).


○ Holding Cost = 10 units × $2.50 = $25.

Stockout Costs:

○ No stockouts occur in this plan.


○ Total Stockout Cost = $0.

Total Relevant Cost:

Total Cost=Setup Cost+Holding Cost+Stockout Cost=$1,050+$25+


$0=$1,075

Total Cost=Setup Cost+Holding Cost+Stockout Cost=$1,050+$25+


$0=$1,075

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