Page 129 - Orlicky's Material Requirements Planning

108 PART 2 Concepts

FIGURE 6-8 Present Earliest Date
Date Assembly of Truck X
Cumulative lead
time. Level
Trans-
1
mission
2 Gearbox
3 Gear
4 Forging

Cumulative Lead Time
Scheduled Date
Assembly of Truck
Latest Date
Forging Order Start
Trans-
1
mission
2 Gearbox
3 Gear
4 Forging

Cumulative Lead Time

Complete order for item A: week 50
Minus lead time of item A: 1 week
Release order for item A: week 49
Complete order for item B: week 49
Minus lead time of item B: 2 weeks
Release order for item B: week 47

Complete order for item C: week 47
Minus lead time of item C: 6 weeks
Release order for item C: week 41

Complete order for item D: week 41
Minus lead time of item D: 3 weeks
Release order for item D: week 38

The preceding release dates of parent orders would establish the timing of gross
requirements for the respective component items, as illustrated in Figure 6-7. Because, in
the example, none of the gross requirements can be fully satisfied from inventory, the tim-
ing of net requirements for each of the items coincides with that of gross requirements.
The timing of the orders providing coverage of net requirements is geared to the latter
(for comple tion dates) and is a function of the respective lead times (for release dates). In