Instructions: • You can scan or take a picture of your diagram and attach to your submission. • Please type your answers in Word/Excel
Questions:
1. MRP
Assume that Product Z is made of 2 units of A and 4 units of B. A is made of 3 units of C and 4 D. D is made of 2 units of E.

Lead times for purchase or fabrication of each unit to final assembly are Z takes 2 weeks; A, B, C, and D take 1 week each; and E takes 3 weeks.

50 units are required in Period 10. (Assume that there is currently no inventory on hand of any these items.)

(a) Show the bill of materials (product structure tree).

(b) Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates.

2. Inventory Management (Reorder Point Calculation)

A distributor of large appliances needs to determine the order quantities and reorder points for the various products it carries. The following data refer to a
specific refrigerator in its product line:
Cost to place an order $100
Holding cost 20 percent of product cost per year
Cost of refrigerator $500 each
Annual demand 500 refrigerators
Standard deviation during lead time 10 refrigerators
Lead time 7 days
Consider an even daily demand and a 365-day year.
a) What is the economic order quantity?
b) If the distributor wants a 97 percent service probability, what reorder point, R, should be used? (z=1.90 for 97%.)