Operation Management For Optimizer Homework

Operation Management For Optimizer Homework

Homework Number Four

1) Complete the Master Schedule Record below:

Calculate the Ending inventory for all weeks, and the Available to Promise for week 2 and week 5

On Hand inventory at end of week 1=75 units

Week

2

3

4

5

6

7

8

9

Forecasted demand

35

40

45

70

55

50

75

90

Booked orders

15

100

48

25

72

22

67

10

Projected ending inventory

MPS

135

215

160

Available to Promise

2) Now suppose marketing drops in an order for an additional 20 units in week 4

Week

2

3

4

5

6

7

8

9

Forecasted demand

45

20

75

40

55

60

65

70

Booked orders

15

100

68

35

62

32

67

15

Projected ending inventory

MPS

100

250

170

Available to Promise

3) Complete the MRP record below. Note a minimum supplier order quantity of 900 units What is the average ending inventory over the 6 weeks?

1

2

3

4

5

6

Gross Req

0

500

500

500

500

500

Lead Time=1 week

Sched Rct.

NR=Maximum(0;GRt-Eit-1-SRt)

Proj End Inventory 1 0

Net Requirements

Planned receipts

Planned Orders

4) Case Study: Real Co Bread maker

Two years ago, Johnny Chang’s business introduced a new bread maker, which, due to its competitive pricing and features, has been a big success throughout the US. While happy to have the business, Johnny was unhappy with the lack of formal planning surrounding the product. He found himself always wondering: Do we have enough to meet the orders we have already accepted? If so, will we have enough to meet future demand?

To get a handle on the situation, Johnny talks to various people within the organization He started with his inventory manager and found that inventory at the end of last week was 7,000 units. Johnny thought that was awfully high.

Johnny also knew that production had been completing 40,000 bread makers every other week for the last year. In fact another batch was due this week. The production numbers were based on the assumption that demand was roughly 20,000 bread makers a week. In over a year, no one had questioned whether forecast levels should be readjusted or not.

Johnny then met with his marketing manager to see what current orders looked like.” No problem,” said Jack Jones, “I have the numbers right here.”

Week

Promised Shipments

1

23500

2

23500

3

21500

4

15050

5

13600

6

11500

7

5400

8

1800

Johnny looked at the figures for a moment and then asked “ When a customer calls up, how do you know if we can meet their order?” “Easy” Jack says “We’ve found from experience that nearly all orders can be fulfilled within two weeks, so we promise them three weeks That gives us a cushion, just in case. The numbers look a little high, but between inventory and the additional 40,0000 coming this week, there shouldn’t be a problem”

1) Develop a master schedule for the bread maker. What do the projected ending inventory and available to promise numbers look like? Has Realco “over-promised”? In your view, should Realco update the forecast or production demand?

Week

Forecast

Booked Orders

Ending Inventory

MPS

Available to Promise

2) Comment on Jack’s approach to order promising. What are the advantages and disadvantages? How could formal master scheduling improve this situation?

3) Following on question 2, which do you think is worse: refusing a customer order upfront because you don’t have the units available or accepting the order and then failing to deliver?