Chapter 15 - Resource Planning Answers To Questions, Problems, and Case Problems Answers To Questions

Solutions Manual for Operations Management: Creating Value Along the Supply Chain, Canadian Edition 15- 1
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
CHAPTER 15 – RESOURCE PLANNING
ANSWERS TO QUESTIONS, PROBLEMS, AND CASE PROBLEMS
Answers to Questions
15-1. MRP is useful for dependent and discrete demand items, complex products, job shop pro-
duction, and assemble-to-order environments. MRP is not needed for very simple
products with few components and no variability in output.
15-2. The demand for cars is independent. The demand for tires is dependent. If a manufacturer
makes 100 cars and four tires are needed for each car, he or she would need 400 tires.
15-3. The objective of an MRP system is to ensure the availability of material while maintain-
ing the lowest possible level of inventory. The major inputs to MRP are: the master
schedule, the product structure record, and the item master file. The output from MRP
can take the form of work orders, purchase orders, and various reports, such as planned
order reports or action reports.
15-4. The master production schedule is created within the confines of the aggregate production
plan. It specifies which end items are to be produced, how many are needed, and when
they are needed. The MPS drives the MRP process by providing final product needs,
from which the MRP system determines component needs.
15-5. Phantom bills are used for transient subassemblies. K-bills group small parts together un-
der one part number. Modular bills are used to simplify forecasting and planning.
15-6. The item master file contains four main sections: description, inventory policy, physical
inventory, and usage/sales. It includes lot sizes, lead times, inventory on hand, and in-
ventory on order.
15-7. Cycle counting selects some items of inventory to count each day. Discrepancies are re-
conciled immediately instead of at the end of the year. The system is geared toward keep-
ing tight control on some items and looser control on others.
15-8. Netting is subtracting out what’s on hand from the demand requirements. Explosion is the
determination of lower-level requirements by multiplying the quantity per assembly by
the parent requirements. Time phasing is the subtracting of lead time from a due date to
get a start date (i.e., order release date). The MRP process consists of exploding down a
bill of material, netting out inventory, and offsetting for lead times to determine order
quantities and release dates.
15-9. The inputs to CRP are the planned order releases from the MRP schedule, a routing file,
and an open orders file. Overloads can be levelled by producing the items in earlier time
periods, producing them in later time periods, using overtime or subcontracting, or hiring
more workers. Underloads can be levelled by pulling work forward, becoming a subcon-
Copyright © 2014 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
tractor, cutting worker hours, or laying off workers.
15-10. MRP systems assume material is the most constraining resource, lead times are fixed, and
every movement and transaction must be reported. These assumptions can be relaxed
with ERP systems. Companies constrained by a particular process may reconcile capacity
issues first and use bills of labour or bills of resources instead of bills of material. ERP
processors today are able to handle variable lead-times, incorporate JIT concepts with
MRP, and utilize more sophisticated scheduling systems with less data requirements.
15-11. (a) requirements for labour, equipment, surgical tools and supplies can be exploded from
a bill of resources established for each type of surgery; (b) classes can be scheduled based
on a bill of courses for students in a particular major; (c) food purchases can be exploded
from a bill of menu offerings; (d) hotel renovations can be scheduled from a bill of mater-
ials by style of room.
15-12. MRP systems focus on an individual plant’s operation; ERP systems manage the re-
sources of an entire enterprise. For example, an MRP system is concerned with customer
demand, production schedules, inventory levels, and available capacity at work centres
within a plant. An ERP system is concerned with customer demand and available capa-
city at its plants worldwide, and production schedules and inventory levels along its sup-
ply chain as well as throughout the company. Support for multiple languages and curren-
cies, foreign taxes and accounting rules, integrated logistics, and electronic commerce are
also common. ERP systems typically contain production-oriented MRP modules as well
as modules for business planning, customer service, financial management, and account-
ing.
15-13. Student responses will vary. The list of SAP Modules includes the functional, logistics,
HR and cross application modules. The material management module includes the func-
tions that support material flow, from the purchase and internal control of production ma-
terials, to the planning and control of work-in-process, to the warehousing, shipping, and
distribution of the finished product.
15-14. Customer relationship management software plans and executes business processes that
involve customer interaction, such as marketing, sales, fullfilment and service. CRM uses
ERP to quote and schedule delivery dates, process customer orders, report order status,
and establish after-sales service.
15-15. Supply chain management software handles all interactions with suppliers along the sup-
ply chain including supplier certification, e-procurement, order fullfilment and network
design. SCM uses ERP’s data base and works with ERP in demand planning and collab-
orative production planning. The distinction between ERP and SCM software is becom-
ing increasingly blurred.
15-16. Student responses will vary. The common comparisons may include SAP and Oracle.
Students may discuss the differences in functionality and integration.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-17. Collaborative product commerce is concerned with new product design and development,
as well as product life cycle management. CRM-CPC-SCM collaboration on design can
reduce time to market for new products and service. CRM-ERP-SCM collaboration gets
the product to the customer faster.
15-18. ERP systems from different vendors can converse via EAI software, EDI, and XML.
Standards of communication are currently being developed.
15-19. Student responses will vary. Some of the common differences include the price, server
ape and product range.
15-20. ERP organizes and manages a company’s business processes by sharing information
across functional areas. IT serves as the backbone for an organization’s information
needs, as well as its e-business initiatives. In addition to the four major modules of fin-
ance and accounting, sales and distribution, production and material management, and
human resources, there are hundreds of support modules. Implementation is hindered by
overambitious time schedule, lack of process knowledge, and erroneous decisions on the
appropriate degree of standardization.
15-21. Student responses will vary.
15-22. Student responses will vary.
15-23. Student responses will vary. Some of the new trends include Social Commerce (social
media related), business analytics, M-commerce and cloud computing.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Answers to Problems
(Answers may vary due to rounding)
15-1. a. 2 13 6
b.
 113   2 2  7
c. LLC 3
15-2.
Leve Ite Quant-

l m ity
0 Z 1
–1 X 2
– –2 U 1
––2 V 2
–1 Y 3
––2 U 1
––2 W 4
Z  12    13 5
No. of U’s per
No. of W’s per Z 4 3 12
15-3.
15-4.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-5. a.
b. [(1 x 2 ) + (2 x 3)] x 100 = 800
c. Orders for C3 should be released at the beginning of day 1.
C3
C2 S2
C1
A
C2
S1
C3
1 2 3 4 5 6
15-6. 4 3 28 3072 different scooters
4 + 3 + 2 + 2 + 2 + 2 + 2 + 2 + 2 + 2 = 23 options in a modular bill of material.
Options allow a product to better match customer needs, but options are also more diffi-
cult and costly to forecast, produce, and inventory than standard products.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-7.
Item Ea Qty Total

Deck $54.9
1 $54.90
0
Grip tape $4.95 1 $4.95
Wheel as- $71.6
2 $143.20
sembly* 0
Nuts & bolts $1.99 4 $7.96
Riser $3.95 2 $7.90
Skateboard $218.91
Profit Margin 10%
Selling Price $240.80
*Cost of Wheel Assembly
Item Ea Qty Total

Wheels $8.95 2 $17.90
Bearings $4.95 4 $19.80
Truck $33.9
1 $33.90
0
$71.60
15-8. a. 2 2 3 12 different bikes
b.
2
10, 000  6, 700 26-inch bikes, 10, 000 0.40
c. 3
4, 000 10-speed bikes
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-9.
Ite Qty for 50 X’s
m
B 50 x 2 100
C 50 x 1 50
D 50 x 1 50
E (50 x 4) + (50 x 2 x 2 x 1) 400
F (50 x 1 x 2) + (50 x 2 x 2 x 2 x 1 ) + (50 900
x 2 x 4)
G 50 x 2 x 2 200
H 50 x 2 x 1 100
I 50 x 1 x 2 x 1 100
15-10.
Item: A LLC: 0 Period
Lot Size: L4L 1 LT: 3 1 2 3 4 5 6 7 8
Gross Requirements 100
Scheduled Receipts
Projected on Hand 10 10 10 10 10 10 10 10 0
Net Requirements 90
Planned Order Receipts 90
Planned Order Releases 90
Item: B LLC: 0 Period

Lot Size: L4L 1 LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 200
Scheduled Receipts
Projected on Hand 5 5 5 5 5 5 0
Net Requirements 195
Planned Order Releases 195
LLC:
Item: C Period
0
Lot Size: Min
LT: 4 1 2 3 4 5 6 7 8
150
27
Gross Requirements
0
Scheduled Receipts 0
14 14 14 14 2 2 2
Projected on Hand 140 20
0 0 0 0 0 0 0
13
Net Requirements
0
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
0
15
Planned Order Releases
0
Item: D LLC:
Period
1
Lot Size: Mult LT: 2 1
2 3 4 5 6 7 8
250
Gross Requirements 58 18
5 0
0 0 0
0
0 0 0 5 5 5 5 5
Net Requirements 13
65
5
Planned Order Receipts 25 25
0 0
Planned Order Releases 25 25
0 0
Planned Order Report

Period
1 2 3 4 5
A 90
B 195
C 150
D 250 250
15-11.
Level Item U Qt
M y
0 Sandbox Ea 1
—1 Seat Ea 4
—1 Nails Ea 16
—1 Box assembly Ea 1
——2 Left corner assembly Ea 1
———3 Nuts and bolts Ea 4
———3 5-foot side Ea 1
———— Unprepared
Ea 1
4 wood
———— Water sealer
Oz 2
4
———— Unprepared wood Ea 1
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
4
Oz 2
4
———3 1-foot wood strip Ea 1
———— Unprepared strip
Ea 1
4
Oz 2
4
——2 Right Corner Assembly Ea 1
— — —3 5-foot side Ea 1
———— Unprepared wood
Ea 1
4
Oz 2
4
———— Unprepared wood
Ea 1
4
Oz 2
4
———3 1-foot wood strip Ea 1
———— Unprepared strip
Ea 1
4
Oz 2
4
———3 Nuts and bolts Ea 4
——2 Nuts and bolts Ea 8
——2 1-foot wood strip Ea 2
———3 Unprepared wood Ea 1
———3 Water sealer Oz 2
15-12.

Lot Size: Mult 25 LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 10 15 25 75 60 85 45 60
Scheduled Receipts
Net Requirements 75 60 70 40 50
Planned Order Receipts 75 75 75 50 50
Planned Order Releases 75 75 75 50 50
15-13.
Item: X LLC: 0 Period
Lot Size: Min 50 LT: 2 1 2 3 4 5 6 7 8
Gross Requirements 25 30 56 25 10 40 30 20
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
0
Release orders in periods 1 through 5 for quantities of 50, 50, 56, 50, and 50 respect-
ively.
15-14.
Beg Inventory 2
= 5
Ex- Roun-
Co = $100
act ded
EOQ
Cc = $1.00 76.16 77
=
d = 29 POQ =2.63 3
a.
Item: File Cabinet LLC: 1 Period
Lot Size: L4L 1 LT: 1 1 2 3 4 5
Gross Requirements 20 40 30 10 45
Scheduled Receipts
Projected on Hand 25 5 0 0 0 0
Net Requirements 35 30 10 45
Planned Order Receipts 35 30 10 45
Planned Order Releases 35 30 10 45
Cost of LFL = (4 * $100) + (5 * $1) = $405
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
b.
Item: File Cabinet LLC: 1 Period
Lot Size: EOQ 77 LT: 1 1 2 3 4 5
Scheduled Receipts
Net Requirements 35 43
Cost of EOQ = (2 * $100) + (5+42+12+2+34) *$1 = $295
c.
Lot Size: POQ 3 LT: 1 1 2 3 4 5
Scheduled Receipts
Cost of POQ = (2 * $100) + (5+40+10) *$1 = $255 Choose POQ
15-15. a.
b. 5 days
c. no
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
d.
Inventory the back panel, drawer guide, side panel and legs.
15-16.
Beg Invent-
150
ory
$400.0 Roun-
Co = Exact
0 ded
EOQ  249.5
Cc = $2.00 250
0
d= 155.63 POQ  1.60 2
Item: A LLC:
Period
0
Lot Size: L4L 1 LT: 1 1 2 3 4 5 6 7 8
Gross Requirements 10 9 8 15 20 30 25
70
0 0 5 0 0 0 0
Scheduled Receipts
Projected on 150
50 0 0 0 0 0 0 0
Hand
Net Requirements 4 8 15 20 30 25
70
0 5 0 0 0 0
Planned Order Receipts 4 8 15 20 30 25
70
0 5 0 0 0 0
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Planned Order Releases 8 7 15 20 30 25

40 0
5 0 0 0 0 0
Cost of L4L = $2,900
Item: A LLC:
Period
0
Lot Size: EOQ LT: 1
1 2 3 4 5 6 7 8
250
90 85 70
0 0 0 0 0
Scheduled Receipts
50 55
0 5 5 5 5 5
0 0 0 0 0
0 0 0 0 0
Cost of EOQ $4, 220
Item: A LLC:
Period
0
Lot Size: POQ 5 LT: 1 1 2 3 4 5 6 7 8
90 85 70
0 0 0 0 0
Scheduled Receipts
Projected on 150 15 30
50 85 0 0 0 0
Hand 0 0
40 70
0 0
5 0 0 0
5 0 0 0
Cost of POQ $2, 770 Choose POQ
15-17. a.
Beg
Inventory
0
=
Co  $200 Exact
Cc  $2.0 EOQ  100.0
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
0 0
50.0 POQ 
d 2.00
0

Lot Size: L4L 1 LT: 0 1 2 3 4
Gross Requirements 50 50 50 50
Scheduled Receipts
Projected on Hand 0 0 0 0 0
Cost of L4L $200 4 $800

Lot Size: EOQ 100 LT: 0 1 2 3 4
Scheduled Receipts
Cost of EOQ  $200 2    100 $2  = $600

Lot Size: POQ 2 LT: 0 1 2 3 4
Scheduled Receipts
Cost of POQ  $200 2    100 $2  $600

Choose EOQ or POQ
b.
Beg Inventory
0
=
Ex- Roun-
Co  $200
act ded
Cc  $2.0 EOQ  77.46 78
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
0
30.0 POQ 
d 2.58 3
0

Lot Size: L4L 1 LT: 0 1 2 3 4
Scheduled Receipts
Cost of L4L $800.00

Lot Size: EOQ 78 LT: 0 1 2 3 4
Scheduled Receipts
Cost of EOQ $656.00

Lot Size: POQ LT: 0
1 2 3 4
3
Scheduled Receipts
Projected on 0
60 50 0 0
Hand
Cost of POQ $620.00

Choose POQ
c.
Beg Inventory 0
=
Co  $200 Ex- Roun-
act ded
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Cc  $2.0 EOQ  77.46 78

0
d 30.0 POQ  2.58 3
0

Lot Size: L4L 1 LT: 0 1 2 3 4
Scheduled Receipts

Scheduled Receipts

Scheduled Receipts

Choose POQ
d.
Beg Inventory = 0
Co  $200 Exact Rounded
Cc  $2.00 EOQ  77.46 78
d 30.00 POQ  2.58 3
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Lot Size: L4L 1 LT: 0 1 2 3 4
Scheduled Receipts

Scheduled Receipts

Scheduled Receipts

Choose POQ
15-18.
Co  $100.0 Exact Roun-
0 ded
Cc  $0.50 EOQ  134.9 135
1
45.50 POQ  2.96 3
d

Lot Size: L4L LT: 1 1 2 3 4 5 6 7 8 9 10
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1
Gross Requirements 50 30 25 35 40 50 35 45 70 75
Scheduled Receipts
Projected on Hand 70 20 0 0 0 0 0 0 0 0 0
Net Requirements 10 25 35 40 50 35 45 70 75
Planned Order Receipts 10 25 35 40 50 35 45 70 75
Planned Order Releases 10 25 35 40 50 35 45 70 75
Item: X LLC:
Period
1
Lot Size: EOQ LT: 1 1
1 2 3 4 5 6 7 8 9
135 0
Gross Requirements 3 3 7
50 30 25 40 50 45 70
5 5 5
Scheduled Receipts
20 25 30 95
5 0 5 0 5 0
Net Requirements 10 25 40
Planned Order Receipts 13 13 13
5 5 5
Planned Order Releases 13 13 13
5 5 5
Item: X LLC:
Period
1
Lot Size: POQ 3 LT: 1 1
1 2 3 4 5 6 7 8 9
0
Gross Requirements 5 3 2 5 7 7
35 40 35 45
0 0 5 0 0 5
Scheduled Receipts
Projected on 70 2 6 3 3 14 7
0 85 0 0
Hand 0 0 5 5 5 5
Net Requirements 1
40 45
0
Planned Order Receipts 7 12 19
0 5 0
Planned Order Releases 7 12 19
0 5 0

Choose POQ
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-19. Requirements Matrix
Item 1 2 3 4 5 6
Product A 100 150 100 200 100 100
Component B 100 150 100 200 100 100
Component C 200 300 200 400 200 200
Load Summary
Work
1 2 3 4 5 6
Centre
Machining 200 300 200 400 200 200
Heat Treat 400 600 400 800 400 400
Assembly 40 60 40 80 40 40
Load Profile Charts
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Pulling work ahead results in inventory costs and may not be possible when operations
have precedence requirements. Pushing work back means due dates will not be met. It
may be preferable to use overtime in peak periods rather than completely level the load.
15-20.
Run Load Load

Period Item Setup Time Units (mins) (hrs)
1 A 15 3 90 285
B 30 15 100 1530
D 45 4 60 285 35.00
2 C 50 10 600 6050 100.83
3 B 30 15 250 3780 63.00
4 C 50 10 160 1650 27.50
Average 56.58
The initial load profile is not doable because more than 40 hours of OT are needed in
period 2.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Completely Levelled Load
Perio Post- Invent-

Load Reg OT
d poned ory
1 35 40 16.58 0 21.58
100.8
2 40 16.58 22.67 0
3
3 63 40 16.58 0 0
4 27.5 40 16.58 0 29.08
226.3
Total 160 66.32 22.67 50.66
3
$994.8
Cost $1,600 $453.40 $151.98
0
Total $
$3,200
=
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Completely Leveled Load Profile
Overtime capacity
Regular capacity
By considering the cost of regular, overtime, inventory and postponement, a more

economical load profile can be determined as shown below.
Economically Levelled Load
Perio Post- Invent-

Load Reg OT
d poned ory
1 35 40 15.83 0 20.83
100.8
2 40 40 0 0
3
3 63 40 23 0 0
4 27.5 27.5 0 0 0
Total 147.5 78.83 0 20.83
$1,475.0 $1,182.4
Cost $0.00 $62.49
0 5
Total Cost = $2,719.94
Economically Leveled Load Profile
Overtime capacity
Regular capacity
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-21. a. Effective capacity  (# workers) (# hours) (utilization) (efficiency)

= (3)(4)(50/60)(.95) = 9.5 hours or 570 minutes
Output = 570/10 = 57 pizzas
b. Breakeven point = $100/($5 – $2) = 33 pizzas

Yes, the promotion is worth it.
15-22.
Tasks Setup Processing #
Load
Time Time Tasks
Government 15 40 2 95*
American
30 120 1 150
Lit
Spanish 10 30 3 100
345
minutes
*This assumes that all of tasks of one type are performed together, so there is only one
setup.
Total time = (12 – 5) (60) = 420 minutes

Total nonworking time = 60 + 30 + 30 + (5  7) = 155 minutes
Utilization = (420 – 155)/420 = .63095 or 63%
Efficiency = 80%
a. Effective capacity = 420  63%  80% = 212 minutes
b. Load percent = 345/212 = 162.74%
c. If Amy were to become more motivated (i.e., efficiency of 90%) and cut out all
nonworking activities except dinner, she could reduce the load percent to 98% and
finish her work on time. As another alternative, Amy could finish her work if she
stayed awake another hour and 20 minutes.
15-23.
Week
Mode
1 2 3 4
l
B2610 50 100 195 150
B2003 15 30 65 45
B2001 20 40 80 60
Model Weld- As-

ing sembly
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
B2610 0.20 0.18

B2003 0.15 0.15
B2001 0.07 0.10
Efficiency 0.95 0.90
Utilizatio
0.90 0.92
n
Hours/wk 40.00 40.00
Load per Week

1 2 3 4 Capacity
Welding 13.65 27.30 54.35 40.95 34.20
Assembl
13.25 26.50 52.85 39.75 33.12
y
Load Percent per Week

1 2 3 4
Welding 40% 80% 159% 120%
Assembly 40% 80% 160% 120%
To level the load, overloads in weeks 3 & 4 could be moved back to weeks 1 & 2
respectively.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15-24.
Clas Time to create key Time to grade each paper # Total Grading Time
s (mins) (mins) Papers (mins)
1 10 2 35 10 + (2*35) = 80
2 15 5 50 15 + (5*50) = 265
3 5 1 60 5 + (1*60) = 65
4 20 10 25 20 + (10*25) = 270
o
680 mins
r
Load = 11.33 hrs
Sleep 5 hours Utilization = 0.63

Eat 1 hour Efficiency = 0.80
Drive 1 hour Capacity = 12 hours
Check-in 1 hour Load % = 11.33/12 = 0.94
Pack 1 hour
Total 9 hours non-grading Yes, Bryan can finish his job and make it to the airport in time.
15-25.
Product MPS Wk Ctr 100 Wk Ctr 200

A 60 (1.70* 60) = 102 (0.50* 60) = 30
B 220 (1.30*220) = 286 (0.90*220) = 198
C 140 (1.80*140) = 252 (0.66*140) = 92.4
Total 640 320.4
Monthly capacity per worker = (40 hours * 4 weeks) = 160 hours
Load Capacity # Workers

Wk Ctr 100 640 160 640 / 160 = 4.00
Wk Ctr 200 320.4 160 320.4 / 160 = 2.00
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Answers to Case Problem 15.1: Just ERPz
1. The case says that the ERP system was needed to handle customer orders, factory
schedules and supply chain coordination. These are specific needs and require that the
software actually be able to make good decisions with accurate data. A smaller system,
more focused in the furniture industry is probably what the company needs, instead of a
large generic system.
2. Just Sofas began as many companies do, with the finance and accounting module, when a
major sales promise had been issued that affected operations’ ability to respond. It does
not appear that JS reviewed its process before automation, or selected processes to
implement that had a high impact on the customer, or that would benefit from integration.
There are many different ERP vendors available, some who specialize in manufacturing
or particular industries, and some for small-to-medium sized businesses, like Just Sofa.
Choosing the same one as major companies could result in an overly complicated system,
or one does not match the needs of JS. If JS is having trouble with scheduling, look for a
vendor that specializes in scheduling, etc.
3. Ruffner developed a “strategy” of quick response without an understanding of operations’

role in executing the strategy. Nor did Ruffner understand the manufacturing capabilities
of the firm and its suppliers, or the relationships between load, capacity, and lead time.
Wishing to complete customer orders quickly does not make it so. Operations was treated
as an after-thought – we’ll promise a four day turnaround and operations will deliver.
4. Overpromising, installing a new IT system at the same time a major initiative is

underway, leaving manufacturing until last in the install, not having the basic prep work
done in terms of data and database structure, not pre-testing the scheduling system, a poor
selection process, and possible mismatch between system and needs all contributed to the
disappointing results. JS needs to scale back, look at its processes, and establish reliable
data before proceeding with the system install.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Answers to Case Problem 15.2: Hosuki
1. With current inventory levels, the 10 cars can be delivered in 6.5 days. The time-phased
assembly chart is shown below:
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
2. Hosuki has used up its inventory in the previous order. To fill an order for 5 more cars re-
quires 7.5 days.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
3. At first glance, to produce a custom-made car in 5 days, Hosuki would have to inventory
transmissions engine blocks, brakes, body parts (quarter panels, hoods, fenders, roofs,
doors), windshields, rims, and tires — not a very practical idea. Examining the activities
under our control, if we reduce the batch size to 5 cars, the assembly time could be cut in
half and the body work reduced to 3.5 days. In addition, we could negotiate with supplier
C to pre-assemble the tires and deliver within 4.75 (rather than 5) days. As shown in the
revised assembly chart, we would still need to inventory engine blocks and transmissions;
or arrange with our suppliers to keep a one-to-two day supply of these items.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Chapter 15 - Resource Planning Answers To Questions, Problems, and Case Problems Answers To Questions

Uploaded by

Copyright:

Available Formats

Chapter 15 - Resource Planning Answers To Questions, Problems, and Case Problems Answers To Questions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 15 - Resource Planning Answers To Questions, Problems, and Case Problems Answers To Questions

Uploaded by

Copyright:

Available Formats

Solutions Manual for Operations Management: Creating Value Along the Supply Chain, Canadian Edition 15- 1

CHAPTER 15 – RESOURCE PLANNING

ANSWERS TO QUESTIONS, PROBLEMS, AND CASE PROBLEMS

tractor, cutting worker hours, or laying off workers.

15-21. Student responses will vary.

15-22. Student responses will vary.

Leve Ite Quant-

b. [(1 x 2 ) + (2 x 3)] x 100 = 800

c. Orders for C3 should be released at the beginning of day 1.

15-6. 4 3 28 3072 different scooters

4 + 3 + 2 + 2 + 2 + 2 + 2 + 2 + 2 + 2 = 23 options in a modular bill of material.

Item Ea Qty Total

*Cost of Wheel Assembly

Item Ea Qty Total

15-8. a. 2 2 3 12 different bikes

Item: B LLC: 0 Period

Planned Order Report

Item: A LLC: 1 Period

Cost of LFL = (4 * $100) + (5 * $1) = $405

Cost of EOQ = (2 * $100) + (5+42+12+2+34) *$1 = $295

Cost of POQ = (2 * $100) + (5+40+10) *$1 = $255 Choose POQ

Planned Order Releases 8 7 15 20 30 25

Cost of L4L = $2,900

Cost of EOQ $4, 220

Cost of POQ $2, 770 Choose POQ

Item: A LLC: 0 Period

Cost of L4L $200 4 $800

Item: A LLC: 0 Period

Cost of EOQ  $200 2    100 $2  = $600

Item: A LLC: 0 Period

Cost of POQ  $200 2    100 $2  $600

Item: A LLC: 0 Period

Cost of L4L $800.00

Item: A LLC: 0 Period

Cost of EOQ $656.00

Item: A LLC: 0 Period

Cost of POQ $620.00

Cc  $2.0 EOQ  77.46 78

Item: A LLC: 0 Period

Cost of L4L $800.00

Item: A LLC: 0 Period

Cost of EOQ $732.00

Item: A LLC: 0 Period

Cost of POQ $540.00

Item: A LLC: 0 Period

Cost of L4L $800.00

Item: A LLC: 0 Period

Cost of EOQ $580.00

Item: A LLC: 0 Period

Cost of POQ $460.00

Item: X LLC: 1 Period

Cost of L4L $910.00

Cost of EOQ $632.50

Cost of POQ $527.50

15-19. Requirements Matrix

Load Profile Charts

Run Load Load

Completely Levelled Load

Perio Post- Invent-