Assume that you are the manager of Assembly, Inc. You have just received an orde

Question

Assume that you are the manager of Assembly, Inc. You have just received an order for 40 units of an industrial robot, which is to be delivered at the start of week 7 of your schedule. Using the following information, determine how many units of subassembly G to order and the timing of those orders, given that subassembly G must be ordered in multiples of 60 units and all other components are ordered lot-for-lot. Assume that the components are used only for this particular robot. For simplicity, also assume that this is the only order the firm is dealing with. 1. Item lead Time (weeks) On Hand Components Robot 10B, G, C(2) E, F 20 G(3), H 4 10 15 2

Explanation / Answer

Order size of industrial robots = 40

Number of robots in hand = 10

Hence, net requirement of industrial robots = 40 – 10 = 30

For 30 items of industrial robots :

Therefore number of item G required for 30 units of industrial robots = 30

Robot has lead time of 2 weeks and item G has lead time of 2 weeks . Therefore if Robot is required in week 7 , these 30 units of item G will be required in week 7 – 2 – 2 = Week 3

Hence number of item G required for 30 units of robot = 30 x 6 = 180

C has a lead time of 1 week and G has a lead time of 2 weeks . Therefore, if robots are required in week 7, these 180 units of G will be required in = 7 – 1 – 2 week = Week 4

Thus , GROSS REQUIREMENT FOR ITEM G:

However, number of G already in hand = 10

Hence , Net requirement :

Total net requirement = 150 + 30 = 180 units

Since it is a condition that G must be ordered in multiples of 60 and weekly requirement of week 4 and week 3 must be met, the ordering schedule should be :

180 UNITS OF G IN WEEK 4, which should cater to :

180 UNITS OF SUBASSEMBLY G TO BE ORDERED IN WEEK 4

180 UNITS OF SUBASSEMBLY G TO BE ORDERED IN WEEK 4

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