Using the information given and assuming that 2500 Model A fountains are scheduled for...

Question:

Using the information given and assuming that 2500 Model A fountains are scheduled for completion, calculate the gross requirements of each component. Use the beginning inventories given.

Component Immediate Parent Usage per parent Lead time weeks Beg. Inven.
A none ---- 1 0
B A 2 2 250
C A 1 6 500
D A 3 3 750
E A 2 2 750
F B 4 2 3000
G B 2 4 1000
H D 3 2 5000
I D 2 4 5000
J E 1 8 1000
K E 5 1 5000
L E 2 4 2500
M F 3 3 250
N F 6 3 2560
O H 2 4 0
P K 1 2 500
Q K 2 3 1000

Gross Requirement:

The gross requirement is the summation of dependent and independent components demand. The gross requirement concept is basically part of operation management where they record inventory demand on a day to day basis. It helps them in ordering the raw material and components for manufacturing the product.

Answer and Explanation:

Component Usage parent Beg. Inventory Total Quantity Gross requirements
A - - 2500 2500
B 2 250 5000 4750
C 1 500 2500 2000
D 3 750 7500 6750
E 2 750 5000 4250
F 4 3000 19000 16000
G 2 1000 9500 8500
H 3 5000 20250 15250
I 2 5000 13500 8500
J 1 1000 4250 3250
K 5 5000 21250 16250
L 2 2500 8500 6000
M 3 250 48000 47750
N 6 2560 9600 93440
O 2 0 30500 30500
P 1 500 16250 15750
Q 2 1000 32500 31500
  • Formula for calculating gross requirement:

For A:

{eq}\begin{align*} & = {\rm{Total}}\;{\rm{Quantity}}\; - \;{\rm{Begning}}\;{\rm{Inventroy}}\\ &{\rm{ = 2500 - 0}}\\ &{\rm{ = 2500}} \end{align*} {/eq}

Formula for Calculating gross requirement for further components:

{eq}\begin{align*} &{\rm{B}}\;{\rm{Componnets}} = {\rm{GrossRequirement}}\;{\rm{of}}\;{\rm{prvious}}\;{\rm{Components}}\; \times \;{\rm{Curent}}\;{\rm{component}}\;{\rm{usage}}\;{\rm{parent}} - {\rm{Begning}}\;{\rm{Inventory}}\\ &{\rm{ = 2500}} \times {\rm{2 - 250}}\\ &{\rm{ = 4750}} \end{align*} {/eq}

  • Calculation for Total Quantity:

Total Quantity for A Component is 2500.

Total Quantity for D Unit is:

{eq}\begin{align*} &= {\rm{Completion}}\;{\rm{Units}}\; \times \;{\rm{Usage}}\;{\rm{Parent}}\\ &{\rm{ = 2500}} \times {\rm{3}}\\ &{\rm{ = 7500}} \end{align*} {/eq}


Learn more about this topic:

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What is Gross Price? - Definition & Formula

from Financial Accounting: Homework Help Resource

Chapter 6 / Lesson 22
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