Concept explainers
What is the difference between a gross requirements plan and a net requirements plan?
To determine: The difference between gross requirements and the net requirements plan.
Introduction:
Gross requirements plan:
The gross requirements plan is the plan where the independent and dependent demand for a product or a component before the on-hand inventory and the scheduled receipts are netted with.
Net requirements plan:
The net requirements plan is the plan which is established on the gross requirements plan formed by deducting the stock on hand and the scheduled receipts. If the total requirement is below the safety stock levels, a planned order is made based on the given lot sizing technique.
Explanation of Solution
Difference between gross and net requirements concept:
Gross requirements plan | Net requirements plan |
It is the plan which is made prior to subtraction of inventory on hand and scheduled receipts. | It is the plan which will take into considerationof the scheduled receipts and inventory on hand before the plan is made. |
The plan is the requirement which needs to be made and the production to be started. | If the requirement is fewer than the stock, the planned order release will be made for the item. |
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Chapter 14 Solutions
EBK OPERATIONS MANAGEMENT
- In gathering requirements, both structured and unstructured techniques could be used. Discuss.arrow_forwardWhat is the net requirement using a Material Requirements Planning program if the gross requirement is 1,250 and the inventory on hand is 50?arrow_forwardGiven the following product structure, master production schedule, and inventory status below and assuming the requirements for each BOM item is 1: (a) develop a gross requirements plan for Item C; (b) develop a net requirements plan for Item C. Click the icon to view the product structure, master production schedule and inventory status. a) Develop a gross requirements plan for Items C. To do so, first find the gross requirements plans for its parents: items A and H. (Enter your responses as whole numbers). Item A Gross req 1 2 More Info 3 Period Gross requirements: A Gross requirements: H Item A B C D E 4 A On Hand 15 110 60 40 85 5 Week 6 7 8 100 Lead Time 1 2 2 1 2 Q 9 90 8 Item F G H E J K 10 60 9 On Hand 80 65 20 110 110 10 11 50 E H K 11 12 12 160 Lead Time 2 1 1 2 2 G C ■ G Xarrow_forward
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