Assignment
Inventory & Warehouse Management
Submitted By: Malik Faaik Ahmed
Roll No: MBSCM-19-29
Class: MBA 1.5 (SCM) Evening
Submitted To: Sir Zubair
Institute of Management Sciences
(CASE STUDY)
APIX POLYBOB COMPANY
Table of Content
Case Study Questions & Discussions
Q1.What are the key issues brought about in the conversation?
What are the key symptoms, and what are the underlying
problems? Be specific in your answers.
Answer:
It is visible from the conversation that there is a huge gap between Material
Requirement Planning (MRP) and Master Production Schedule (MPS). Both are
not maintained properly in the organization. Inventory Management is also an
issue.
These major planning issues leads to more inventory, high expediting cost, more
premium freight costs from suppliers, and poor efficiency including more overtime
to relieve some of the late order condition. Plant Manager also believes that EOQ
and re-order point’s values are not correct.
Q2. Use the product information to develop an MRP approach to
the problems. Would MRP solve the problems? If so, show
specifically how MRP would avoid the problems discussed by Ken
and Jim.
Answer:
Based on the discussion and current problems in Apix Polybob Company, MRP
can be developed as follows;
Part No. 1 2 3 4 5 6 7 8 9 10 11
Gross Requirements 50 50 60 60 50
Scheduled Receipts
Projected available
A
Net Requirements 50 50 60 60 50
Planned Order Receipt 50 50 60 60 50
Planned Order Release 50 50 60 60 50
Gross Requirements 0 0 50 0 50 0 60 0 60 0 50
Scheduled Receipts
Projected available 10 10 10 40 40 70 70 10 10 30 30 60
B
Net Requirements 40 10 50 20
Planned Order Receipt 80 80 80 80
Planned Order Release 80 80 80 80
Gross Requirements 0 0 100 0 100 0 120 0 120 0 100
Scheduled Receipts
Projected available 40 40 40 90 90 140 140 20 20 50 50 100
C
Net Requirements 60 10 100 50
Planned Order Receipt 150 150 150 150
Planned Order Release 150 150 150 150
Gross Requirements 0 150 0 150 0 0 0 150 0 150 0
Scheduled Receipts
Projected available 180 180 30 30 80 80 80 80 130 130 180 180
D
Net Requirements 120 70 20
Planned Order Receipt 200 200 200
Planned Order Release 200 200 200
Gross Requirements 0 390 0 390 0 0 0 390 0 390 0
Scheduled Receipts
Projected available 400 400 10 10 20 20 20 20 30 30 40 40
E
Net Requirements 380 370 360
Planned Order Receipt 400 400 400
Planned Order Release 400 400 400
Gross Requirements 380 380 380 380
Scheduled Receipts 500
Projected available 50 550 170 170 290 290 290 290 410 410 30 30
F
Net Requirements 210 90
Planned Order Receipt 500 500 500
Planned Order Release 500 500
In that case, all the demands are satisfied, the inventory level is in its minimum
level (and the total cost as well).
Q3. Do any conditions bother you about the ability of MRP to deal
with the problems? What specifically are those conditions?
Answer:
If Sales department changes the order qty.
Error in feeding Bill of Material (BOM).
Delay in releasing the component.
If supplier delay to supply the material.
If safety / reorder point is not maintained properly.
Issue in capacity utilization.
For exploding the requirement, if EOQ doesn’t match.
It is visible from the conversation
that there is a huge gap between
Material Requirement
Planning (MRP) and Master
Production Schedule (MPS). Both
are not maintained properly in
the organization. Inventory
Management is also an issue.
These major planning issues leads
to more inventory, high expediting
cost, more premium
freight costs from suppliers, and
poor efficiency including more
overtime to relieve some of
the late order condition. Plant
Manager also believes that EOQ
and re-order points values are
not correct.
It is visible from the conversation
that there is a huge gap between
Material Requirement
Planning (MRP) and Master
Production Schedule (MPS). Both
are not maintained properly in
the organization. Inventory
Management is also an issue.
These major planning issues leads
to more inventory, high expediting
cost, more premium
freight costs from suppliers, and
poor efficiency including more
overtime to relieve some of
the late order condition. Plant
Manager also believes that EOQ
and re-order points values are
not correct.
Q4. Suppose it was discovered that only 250 of component E were in
stock instead of the 300 listed on the inventory record. What
problems would this cause (if any), and what are some of the ways
that these problems could be addressed? How would (if at all) MRP
help you when other methods might not?
Answer:
There could be chance of delay to produce Finished Goods (FG). More qty of
safety stock should be considered for order point. MRP has two main
characteristics known requirement and the known period of requirement. Using the
MRP Planner can reschedule due date of open order as required, reconcile error
and try to find their cause, solve critical material shortage by expediting and
replanning. MRP is detailed tool and it will give fair idea about material
requirement to planner.
Q5. Suppose that the design engineer advises that he has a new
design for component F. It won’t be ready until sometime after week
2, but he wants you to give a date for the first supplier shipment to
come in, and you should be ready to tell the supplier how many to
ship. Since the change is transparent to the customer, the design
engineer advises you to go ahead and use up any existing material of
the model. How will MRP help you to deal with this issue?
Answer:
Though, new design is developed for component F; it should have ideally new part
number. In the MRP, new part number should be created. Accordingly material
product tree and level can be reordered. Lead time according to component F
should be re-fixed in the MRP. BOM has to be changed, in case of change in
component to make component F (new part number). MRP will help to make
change easily. It will enable to make production / Inventory and related schedule
robust.
Q6. Can you think of any other “what if” questions that might be
more easily addressed by a systematic approach such as MRP?
MRP can be used for multiple products. Multiple BOMs and common materials
can be easily maintained by MPR. E.g. one part number goes as raw material (RM)
to make few final products (FG), the common component will be nicely
maintained in the Inventory.
For different components, different order point can be maintained.
MRP is equally useful to maintain several products and its components.
