Free Essay

Mrp 2

In: Business and Management

Submitted By zachsartain
Words 381
Pages 2
Executive Summary
Facing capacity problems with two items which are manufactured in-house (the Circuit Board A and the I/O Sub C) and past due deliverables of the two item’s component parts, Judy must make decisions on how to address these issues. The accounting and finance department also requested from Judy to provide them with inventory and capital costs for each component.

Items manufactured in-house (Circuit Board A and the I/O Sub C)

Judy identified several periods which had a negative unit balance where needed capacity could not be fulfilled. Judy’s approach was to identify periods with deficiency and utilize periods which had a surplus of units to be produced. Below are the results for both Items.

Circuit Board A

| PD | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | Planned order releases | 0 | 0 | 79 | 200 | 200 | 200 | 400 | 400 | 400 | 200 | 0 | 0 | 0 | Actual Capacity (units) | | 300 | 300 | 200 | 200 | 200 | 400 | 400 | 400 | 400 | 400 | 400 | 400 | Needed Capacity (units) | | 0 | 79 | 200 | 200 | 200 | 400 | 400 | 400 | 200 | 0 | 0 | 0 | Over/(Under) (units) | | 300 | 221 | 0 | 0 | 0 | 0 | 0 | 0 | 200 | 400 | 400 | 400 |

I/O Sub C | PD | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | Planned order releases | 0 | 425 | 986 | 986 | 1020 | 1989 | 1989 | 1989 | 1003 | 0 | 0 | 0 | 0 | Actual Capacity | | 1000 | 1000 | 1000 | 2000 | 2000 | 2000 | 2000 | 2000 | 2000 | 2000 | 2000 | 2000 | Needed Capcity | | | 425 | 986 | 986 | 1020 | 1989 | 1989 | 1989 | 1003 | 0 | 0 | 0 | 0 | Over/Under | | | 575 | 14 | 14 | 980 | 11 | 11 | 11 | 997 | 2000 | 2000 | 2000 | 2000 |

As shown in the tables above, neither item has any Past Due planned order releases therefore Judy will not need to subcontract to meet the requirements.

Component parts

Judy identified that component parts all had past due planned order releases, therefore she must expedite related purchase orders. The inventory cost, capital cost, and expediting costs are provided below.

Item | Inventory and Capital Cost per Unit for all periods | Expediting Cost for Past Due Units | Resistor B | $ 35,862.75 | $ 598,500.00 | T-former D | $ 80,873.10 | $ 1,819,200.00 | Screw E | $ 22,020.44 | $ 71,100.00 | Bolt F | $ 4,400.00 | $ 21,000.00 |…...

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