Page 126 - Orlicky's Material Requirements Planning

CHAPTER 6 The Material Requirements Planning System 105

Transmission A: 2
Gearbox B: 15
Gear C: 7
Forging blank D: 46
The task is to determine net requirements for these items. When first confronted
with this type of problem, most people will apply the following logic:
Item A: 100 – 2 = 98
Item B: 100 – 15 = 85
Item C: 100 – 7 = 93
Item D: 100 – 46 = 54

This, however, is incorrect. The true net requirement for item D, for in stance, is not
54 but 30, and the correct netting logic that leads to it is as follows:

Quantity of trucks to be produced: 100
Transmissions required (gross): 100
Transmissions in inventory: 2
Net requirements, transmission A: 98
Gearboxes required for 98 transmissions (gross): 98
Gearboxes in inventory: 15
Net requirements, gearbox B: 83
Gears required for 83 gearboxes (gross): 83
Gears in inventory: 7
Net requirements, gear C: 76
Forgings required for 76 gears (gross): 76
Forgings in inventory: 46
Net requirements, forging D: 30
The net requirement quantity for item D can be verified as follows:

Quantity of trucks to be produced: 100
Quantity of item D that will be consumed: 100
Inventory of D: 46
Inventory of C containing D: 7
Inventory of B containing C: 15
Inventory of A containing B: 2
70
Net requirements for item D: 30
Totals: 100 100