Production, Capacity And Material Planning Page 48
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60Material Requirements Planning
Example: At the packaging department of a sugar refinery:
A very-high-grade powdered sugar:
Boxed
Level 0
Sugar
Sugar
Cartons
Level 1
Sugar-refining lead time is five days;
Production lead time (filling time) is negligible;
Annual demand: D = 800 tons and σ= 2,5
Lead-time demand is normally distributed with Dτ = 16 tons and στ = 3,54 tons
Fill rate = 95%
A = $50, c = $4000, i = 20%
Production Management
147
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