MGMT 410
Production Management

Homework #10

Name:__________________________

APU Student ID.: __________________

Submission: Please upload your documents in the Assignment section on Canvas. You may either scan your homework documents or take pictures of them.

Grading Policy: Please show all your work on your paper. If you do not specify appropriate procedures on your homework, you will not get full credit.

Coverage of HW:

Chapter 14. Materials Requirement Planning (MRP)

[20 pts] Lot Sizing in Material Requirement System (MRP)

Michael Jordan, senior in the department of management at JSU, recently got a job as a production planner at Honda Plant in Lincoln, Alabama. His first task on the job training is to review the master production plan shown below: (Initial inventory = 140 units, Ordering cost = $300 per order, Lead time = 1 week, Holding cost = $2 per unit per week. No penalty cost for shortage/stock-outs.)

Develop an ordering plan and costs for this plant using the following techniques.

(a) Develop the lot-for-lot MRP table and calculate the total relevant costs.

Holding Cost = Ordering Cost = Total Cost =

(b) Develop the Economic Order Quantity (EOQ) lot sizing technique. (Assume EOQ = 200)

Holding Cost = Ordering Cost = Total Cost =

(c) Develop the Periodic Order Quantity (POQ) lot sizing technique. (Assume POQ Interval = 2 weeks)

Holding Cost = Ordering Cost = Total Cost =

(d) Among the three lot sizing techniques above, which one is the best strategy with the lowest cost?

2.

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4.

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