Question

Sigma Electronics produces telephone cameras for cell phone. The production manager would like to create an MRP for their cell phone cameras with a minimum cost possible. The following table show gross requirements of the product Develop a Part Period Balancing (PPB) solution and calculate the total relevant costs for the MRP. 2 4 8 11 Period Gross requirements 1 20 3 40 5 40 6 60 7 30 9 20 10 70 12 50 Also, for this plan the Holding cost = $2.50/unit/period; setup cost = $200; lead time = 1 period; beginning inventory = 40 units. Use the table below to develop a PPB solution for MRP (enter your responses as whole numbers). Period 2 4 8 11 1 20 3 40 5 6 40 60 7 30 9 20 10 70 12 50 40 Gross requirements On-hand at beginning of period On-hand at end of period Order receipt Order release The total relevant cost is = $ (enter your response as a whole number).

Answer 1

Economic Part Period=	Set Up cost /Inventory Holding cost
In the part
Set up cost-A	200
Holding cost-B	2.5
EPP VALUE(A/B)	80
Period		1	2	3	4	5	6	7	8	9	10	11	12
Net requirement		20		40		40	70	30		10	80		50
Opening Inventory	40	40	20	20
Net requirement-C				20		40	70	30		10	80		50
Inventory carrying Period-D					1	2	3
PP Value (C*D)						80	210
Accumulated PP value						80	290
Inventory carrying Period-D								1	2	3	4
PP Value(C*D)								30		30	320
Accumulated PP value								30	30	60	380
Inventory carrying Period-D												1	2
PP Value(C*D)													100
Accumulated PP value													100
Order Receipt				60			110				80		50
Period		1	2	3	4	5	6	7	8	9	10	11	12
Gross Requirement		20	0	40	0	40	70	30	0	10	80	0	50
On hand at Start	40	40	20	20	40	40		40	10	10
On hand at end		20	20	40	40		40	10	10
Net requirement				20			70				80		50
Order Receipt				60			110				80		50
Order Release			60			110				80		50
Total Holding cost $	180 X @2.5	450	( based on hand Inventory at the end of period
Total Set up cost $	4 X @200	800
Total Cost $		1250