Brunswick Motors Inc.

: A Case on MRP
Team 7
P Phani Kumar 1101078 Rahul Dumawat 1101083 Phanidhar G 1101079 Abhishek Kumar Singh 1101052 Sameer Patil 1101087

Material requirements planning (MRP)

Production planning and inventory control system Ensures materials are available for production Maintains lowest possible inventory Plans manufacturing

Components of MRP system

Master Production Schedule (MPS) Bill of Materials (BOM) Inventory Records

Lot Sizing

Lot for lot Economic Order Quantity Least total cost Least unit cost

Brunswick s Motor Inc.

LT(weeks) Level 0 Engine Assembly Level 1 Crank case Level 1 Gear box Level 2 Input shaft

Usage

Set up cost($ per order) Gear box Input shift 90 45

Inventory cost($ per unit per week) 2 1

2 3

1 per engine 2 per gear box

Week Demand

1 15

2 5

3 7

4 10

6 15

7 20

8 10

10 8

11 2

12 16

Gear box requirements

Gross reqts 15 5 7 10 15 20 10 8 2 16

Scheduled receipts

10

15

20

10

16

Projected available balance

17

10

15

20

10

16

Projected available balance (eow)

Net reqts Planned order release Set up cost Inventory carrying cost Total cost

10

15

20

10

16

10

15

20

10

16

90

90

90

90

90

90

90

90

94

94

90

90

90

90

90

90

Input shafts
Gross reqts 30 10 14 20 0 30 40 20 0 16 4 32

Scheduled receipts Projected available balance Projected available balance (eow)

22

12

30

40

20

16

32

40

32

22

20

30

40

20

16

32

10

22

Net reqts

12

30

40

20

16

32

Planned order release Set up cost Inventory carrying cost Total cost

12

30

40

20

16

32

45

45

45

45

45

45

45

10

22

55

22

53

45

45

45

45

45

Total Costs : Lot for Lot

Total Costs = Gear Box Costs + Input Shaft Costs Total Costs = 728 + 355 Total Costs = 1083 Now we shall look at that LTC method to compare the two methods.

Gear box
S.No 5 4 3 Weeks 1 2 3 4 5 6 7 8 9 10 11 12 Weeks 1--2--3--4--5 6--7--8--9 10--11--12 Net requirement 0 0 5 10 0 15 20 10 0 8 2 16 Prodn qty 15 0 0 0 0 45 0 0 0 26 0 0 Qty 0 0 16 Closing Inventory Set up cost inventory cost 40 40 34 Closing inventory 15 15 10 0 0 30 10 0 0 18 16 0 Total cost 90 90 90 80 80 68 Diff. 10 10 22 Total cost 120 30 20 0 0 150 20 0 0 126 32 0 498

Inventory cost Set up cost 30 30 20 0 0 60 20 0 0 36 32 0 90 0 0 0 0 90 0 0 0 90 0 0

S.No 5 4 3 Weeks 1 2 3 4 5 6 7 8 9 10 11 12

Weeks 1--2--3--4--5 6--7--8--9 10--11--12 Net requirement 0 0 0 12 0 30 40 20 0 16 4 32

Qty 0 0 32 Prodn qty 12 0 0 0 0 90 0 0 0 52 0 0

Input shaft Closing inventory 36 80 68 Closing inventory 12 12 12 0 0 60 20 0 0 36 32 0 Total cost

Set up cost 90 90 90 Inventory cost 12 12 12 0 0 60 20 0 0 36 32 0

Inventory cost 36 80 68 Set up cost 45 0 0 0 0 45 0 0 0 45 0 0

Diff. 54 10 22 Total cost 57 12 12 0 0 105 20 0 0 81 32 0 319

Total Costs : LTC

Total cost for LTC lot sizing is 817 Which is 266 lesser as when compared to Lot For - Lot