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Questions: 1, 2, 3a, 3b, & 3c (p. 542), Case: Promotional Novelties (p. 549)
1.
Contrast independent and dependent demand.
 
2.
When is MRP appropriate?
 
3.
Briefly define or explain each of these terms.
 
a. Master schedule.
b. Bill of materials.
c. Inventory records.
 
CASE: Promotional Novelties
Promotional Novelties provides a wide range of novelty items for its corporate customers. It has just received an order for 20,000 toy tractor-trailers that will be sold by a regional filling station company as part of a holiday promotion. The order is to be shipped at the beginning of week 8. The tree diagram shows the various components of the trucks.
 
The company can complete final assembly of the tractor-trailers at the rate of 10,000 a week. The tractor and truck bodies are purchased; lead time is three weeks. The wheels are the manager’s main concern.
The company has a sufficient supply of brackets on hand. Assembly time is one week each for tractors, trailers, and wheel assembly. However, the wheel department can only produce wheels at the rate of 100,000 a week. The manager plans to use the wheel department to full capacity, starting in week 2 of the schedule, and order additional wheels from a supplier as needed. Ordered wheels come in sets of 6,400. The lead time for delivery from the supplier is expected to be two to three weeks.
Questions
1.
How many wheels sets should the manager order?
2.
When should the wheels sets be ordered?
 
 

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