10.2 Enterprise Resource Planning and Outsourcing Flashcards
1
Q
A company uses material requirements planning (MRP) and manufactures a product with the following product
structure tree.
x
A (2) - ———B(5)
C (1) D(3) — E(2)
The company has just received an order for 100 units of X, the finished product. The company has 20 units of X, 100 units of B, and 50 units of E in inventory. How many units of E must the company purchase in order to fill the order?
A. 550
B. 800
C. 1,000
D. 950
A
A. 550
The company already has 20 units of the finished product in inventory so 80 will need to be manufactured to fill this order. The amount of Subunit B that must be purchased is [(80 × 5) – 100 on hand] = 300. The amount of Subunit E that must be purchased is therefore [(300 × 2) – 50 on hand] = 550.
