Assume you are the manager of Assembly, Inc. You have just received an order for 38 units of an industrial robot, which is to be delivered at the start of week 7 of your schedule. Using the following information, determine how many units of subassembly G to order and the timing of those orders, given that subassembly G must be ordered in multiples of 80 units and all other components are ordered lot-for-lot. Assume that the components are used only for this particular robot. Item Lead Time (weeks) On Hand Components
Robot 2 10 B, G,C(3)
B 1 5 E, F
C 1 20 G(2),H
E 2 4
F 3 8
G 2 15
H 1 10

G order Quantity = 320 no's to meet demand of 251 nos. in multiples of 80s.

G Order timing = 2nd week (beginning)

Explanation:

Solution:

Subassembly G order quantity (in units):

Based on the bill of material structure.

G sub assemblies needed for making one robot = 6+1 = 7

G Sub Assemblies needed making 38 robots = 38 x 7 = 266

Inventory of G sub assemblies = 15

G sub assemblies order needed = Demand - inventory

G sub assemblies order needed = 266 - 15

G sub assemblies order needed = 251

G sub assemblies order needed in multiple of 80's

Since, order quantities in multiple of 80's and more than equal to 251

G assemblies order quantity = 80x4 = 320

The multiple of 80's will meet the demand of 251

Less than 320, we cannot order, because it will not meet the demand of 251. As 80x3 = 240.

So,

320 is the minimum order quantity in multiple of 80's to meet the demand of 251.

b.

Sub assembly G order should start at beginning of the week.

Note: Lead time structure with respect to BOM structure for robot is attached below in the attachment.

Since, G order timing = 2nd week.