I.

Problem Statements
This case study delves into the topic of materials requirement planning. Materials
requirement planning is utilized when the products in the inventory have dependent demand or
when a schedule of production can be created (Heizer, 2017). In this case, the production of #377
lawn sprinkler requires the use of dependent demand inventory modelling. Given the master
production schedule, bill of materials, indented bill of material, and inventory status report which
are all found in the Appendix, this paper aims to determine the following.

1. Product structure for #377 lawn sprinkler

II. Solution
A. Material requirements planning for #377 Lawn Sprinkler
1. Product Structure for #377 Lawn Sprinkler
2. Net Material Requirements for the Lawn Sprinkler and its components

MATERIAL : 377 NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
0
LOT SIZE : GROSS REQUIREMENTS 1000 2000
LFL
LEAD TIME : 1 week SCHEDULED RECEIPTS

ON HAND : 500 PROJECTED ON HAND 200 200 200 200 200

SAFETY STOCK : 300 NET REQUIREMENTS 800 2000

HOLDING COST : - PLANNED ORDER RECEIPTS 800 2000

SET/OR COST : - PLANNED ORDER RELEASES 800 2000

MATERIAL : M NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
1
LOT SIZE : GROSS REQUIREMENTS 800 2000
LFL
LEAD TIME : 1 week SCHEDULED RECEIPTS

ON HAND : 200 PROJECTED ON HAND 200 200 200 200

SAFETY STOCK : 0 NET REQUIREMENTS 600 2000

HOLDING COST : - PLANNED ORDER RECEIPTS 600 2000

SET/OR COST : - PLANNED ORDER RELEASES 600 2000

MATERIAL : F NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
1
LOT SIZE : GROSS REQUIREMENTS 800 2000
LFL
LEAD TIME : 1 week SCHEDULED RECEIPTS

ON HAND : 300 PROJECTED ON HAND 300 300 300 300

SAFETY STOCK : 0 NET REQUIREMENTS 500 2000

HOLDING COST : - PLANNED ORDER RECEIPTS 500 2000

SET/OR COST : - PLANNED ORDER RELEASES 500 2000

MATERIAL : H NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
1

1
LOT SIZE : GROSS REQUIREMENTS 800 2000
1000+
LEAD TIME : 2 weeks SCHEDULED RECEIPTS

ON HAND : 1500 PROJECTED ON HAND 300 300 300 300 500 500 500 500

SAFETY STOCK : 200 NET REQUIREMENTS 500 1500

HOLDING COST : - PLANNED ORDER RECEIPTS 1000 1500

SET/OR COST : - PLANNED ORDER RELEASES 1000 1500

MATERIAL : A NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
2
LOT SIZE : GROSS REQUIREMENTS 26000 100000
50000+
LEAD TIME : 2 weeks SCHEDULED RECEIPTS 50000

ON HAND : 30000 PROJECTED ON HAND 10000 60000 60000 34000 34000 34000 34000

SAFETY STOCK : 5000 NET REQUIREMENTS 66000

HOLDING COST : - PLANNED ORDER RECEIPTS 66000

SET/OR COST : - PLANNED ORDER RELEASES 66000

MATERIAL : B NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
2
LOT SIZE : GROSS REQUIREMENTS 3300 12000
10000+
LEAD TIME : 1 week SCHEDULED RECEIPTS

ON HAND : 5000 PROJECTED ON HAND 2500 2500 2500 9200 9200 9200 9200 7200 7200

SAFETY STOCK : 0 NET REQUIREMENTS 800 2800

HOLDING COST : - PLANNED ORDER RECEIPTS 10000 10000

SET/OR COST : - PLANNED ORDER RELEASES 10000 10000

MATERIAL : C NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
2
LOT SIZE : GROSS REQUIREMENTS 600 1000 2000
1000+
LEAD TIME : 2 weeks SCHEDULED RECEIPTS 1000

ON HAND : 1000 PROJECTED ON HAND -300 700 700 100 100 100 100

2
SAFETY STOCK : 500 NET REQUIREMENTS 900 1900

HOLDING COST : - PLANNED ORDER RECEIPTS 1000 1900

SET/OR COST : - PLANNED ORDER RELEASES 1000 1900

MATERIAL : D NET REQUIREMENT PLAN PERIOD

BOM LEVEL : 0 1 2 3 4 5 6 7 8
2
LOT SIZE : GROSS REQUIREMENTS 1500 6000
10000+
LEAD TIME : 2 weeks SCHEDULED RECEIPTS 10000

ON HAND : 3000 PROJECTED ON HAND 1000 11000 11000 9500 9500 9500 9500 3500 3500

SAFETY STOCK : 0 NET REQUIREMENTS

HOLDING COST : - PLANNED ORDER RECEIPTS

SET/OR COST : - PLANNED ORDER RELEASES

3. Summary of Planned Order Releases for the Lawn Sprinkler and its components

Week

Item 1 2 3 4 5 6 7 8
Code

377 800 2,000

M 600 2,000

F 500 2,000

H 1,000 1,500

A 66,000

B 10,000 10,000

C 1000 1,900

B. Conclusion

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The Materials Requirement Plan displayed in the case was developed using the given
information found in the tables that have been attached in the paper’s appendix. As the
product structure explains, materials A, C, and D, having equal lead times of 2 weeks, started
a week earlier than B which has a lead time of 1 week. In total, A required 50 components,10
for material M and 40 for material F, B required 3 components for M and F each, C required
1 component for M, and D required 3 components for F. Materials M, F, and H each required
1 component in order to make the final #377 Lawn Sprinkler.

The specific details for placing orders for the materials are reflected in their
individual Net Requirement Plans. The NRPs were developed using the given information
from Table 4, the Inventory Status Report which has data on the quantity of materials on
hand, in safety stock, allocated, the lot size, the lead time, the scheduled receipts, and the
service part orders. The NRPs explain how much and when the materials are needed and
ordered/received along with the requirements that need to be met. The information from
Table 4 was also used in order to create the Summary of Planned Order Releases whose name
is self-explanatory as the order releases and receipts from the NRPs were simply lifted from
there and compiled into a new table.

C. Recommendations

The role of Material Requirement Plan (MRP) in the analysis of the detailed
production schedules of the departments has assisted the group to accomplish the planned
order schedule - a summary of scheduled order releases of what materials to order, how
many of them to order, and when to place orders for every material in the production system.
Even so all these values were calculated manually. In order to make the MRP entirely
operative and accurate at any circumstances, it would be advisable to install an MRP
computer software, and perhaps a computerized list of the inventory status to keep track of
the whole production system. Moreover, improving forecasting methods for demand
intended for constructing a more accurate production schedule is highly recommended.

III. References
Heizer, J., Render, B., and Munson, C. (2017). Operations Management: Sustainability and Supply
Chain Management (12th Ed.). Singapore: Pearson Education South Asia Pte Ltd.

IV. Appendix

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A. Master Production Schedule of #377 Lawn Sprinkler

B. Bill of Materials of #377 Lawn Sprinkler

C. Indented Bill of Materials of #377 Lawn Sprinkler

D. Inventory Status Report of #377 Lawn Sprinkler

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