Test: APP & MRP Level - 1 - Mechanical Engineering MCQ

The time period used for planning purposes in MRP-usually a week.

Chase Demand Strategy

- Chase demand strategy is a mixed strategy for APP that involves adjusting production levels in response to changes in demand.
- This strategy entails increasing or decreasing production levels as demand fluctuates, allowing the company to match supply with demand more effectively.
- By implementing chase demand strategy, APP can avoid excessive inventory levels during periods of low demand and prevent stockouts during periods of high demand.
- This approach helps APP optimize production costs and maintain a more efficient operation overall.

Inventory Status File Contents:

• On hand inventory
• Lot sizes
• Lead times

The inventory status file typically includes information such as the current level of on hand inventory, lot sizes for ordering materials, and lead times for receiving new inventory. These details are crucial for managing inventory levels and ensuring that materials are available when needed.

Total units of ‘B’ required to make one unit of A

= 1 × 1 + 1 × 1 × 1 + 1 × 1 × 1 × 1 + 1 × 1× 1 × 1 = 4

∴ Total units of ′ B′ required to manufacture 100 units of A = 4 × 100 = 400

TC = FC + VC × Q

TC)_I = 20 + 3 × 100 = 320

TC)_II = 60 + 1 × 100 = 160

TC)_III = 40 + 2 × 100 = 240

(FC + VC × Q)₁ = (FC + VC × Q)₂

40,000 + 20 × Q = 35,000 + 30 × Q

5000 = 10 Q

Q = 500