Laila Hasan the production manager for Custom Industrial Mowers was beginning to prepare net Material Requirements Plan for the next 10 weeks of production for their popular mower, the Grass Hog GT 3000. Sales and operations planning was ongoing at the company. An aggregate production plan was developed about 3 months ago for all of their GT models of mowers. During that process, output capacity at the plant was matched to production to ensure the plan would work. Finally, a Master Production Schedule for the Grass Hog GT 3000 was set for the coming weeks. Laila knew that the production schedule was subject to change. Retail customers reviewed their needs and often made last-minute adjustments to their purchases. Planning production levels was always a challenge at the plant. Too little production would lead to stock outs and potential lost sales. Overproduction was met with warnings from the finance department stating that there was too much money tied up in inventory. The Grass Hog GT 3000 bill of materials was relatively simple. A lot of the sub-assemblies and components were purchased from outside suppliers; the plant modified and assembled pieces in stages to complete the mower. The completed mower consisted of fastening two base sections with one motor assembly. The base section fabrication was challenging. It required a pre-cut steel plate to be stamped into one of the base sections using a heavy press. A fastening kit was then used to bind the steel sections together. The motor assembly was produced by welding a completed motor to an undercarriage. The undercarriage was built with the same fastening kit used for the base section. A completed undercarriage required the fastening kit to be combined with a mowing blade. The specialized mowing blade was produced by stamping the same precut steel plate that was used in the base section. There was a quality issue with the supplier of the steel plate last week. An initial inspection revealed that 900 pieces of the steel plate were out of gauge and therefore rejected. Laila contacted the supplier to have them replaced. The replacement shipment was confirmed to come in week 2 of the schedule. Laila reviewed the up to date week ending inventory levels for the mower along with all of its components, subassemblies and their respective lead times. All the relevant data is summarized in the chart below. The items in bold indicate that they are purchased directly from a supplier. The other items are fabricated in the plant.
- Define 10 relevant items related or listed in your MRP charts.
- Design a product structure tree for the entire Bill of Materials. Indicate all levels in production.
- Using the blank MRP sheets, fill in all relevant data needed to complete the MRP plan for the next 10 weeks. Note that there are eight different products that need to be planned.
- Analyze and interpret the data in your MRP plan. Report on your findings.
- What effect do lead-time and lot sizing have on an MRP? Demonstrate with an example of each.
- Laila will need to make a recommendation to management on what can be done to alleviate the immediate problem in the MRP. Present that recommendation and justify your decision .