---
title: "MRP explosion with lot-for-lot ordering"
subject: "Industrial Engineering and Management"
chapter: 5
key: "semester_6/industrial_engineering_and_management:mrp-net-requirement-calculation"
source: https://www.bctengineer.com/q/semester_6/industrial_engineering_and_management/mrp-net-requirement-calculation
site: BCT Engineering
---

# MRP explosion with lot-for-lot ordering

Industrial Engineering and Management · Chapter 5: Material Requirement Planning (MRP I and MRP II)

- Asked in: year not given, 8 marks
- Video: [Lot-for-Lot (L4L) Material Requirements Planning](https://www.youtube.com/watch?v=kK4Dd6EELtQ) — Tim Nelson
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_6/industrial_engineering_and_management/mrp-net-requirement-calculation
- Whole chapter: https://www.bctengineer.com/md/semester_6/industrial_engineering_and_management/chapter-5

## Question

Product A is assembled from 2 units of component B. The master production schedule requires 50 units of A in week 4 and 80 units of A in week 6. Data: A has on-hand stock of 20 units, lead time 1 week; B has on-hand stock of 40 units, a scheduled receipt of 30 units in week 2, and lead time 2 weeks. Use lot-for-lot ordering. Prepare the MRP records for A and B for weeks 1 to 8 and find the planned order releases.

## Short answer

MRP for A: release 30 units in week 3 and 80 in week 5. For B: release 150 units in week 3 (lead time 2 weeks). Lot-for-lot ordering used.

## Answer

#### Method
For each item: Net requirement = Gross requirement - (projected on hand + scheduled receipt). Planned order receipt = net requirement (lot-for-lot). The planned order release is the receipt moved earlier by the lead time. The releases of A give the gross requirement of B: $2 \times$ A releases.

#### Item A (LT = 1 week, on hand 20)

| Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|
| Gross requirement | 0 | 0 | 0 | 50 | 0 | 80 | 0 | 0 |
| Scheduled receipts | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Projected on hand | 20 | 20 | 20 | 0 | 0 | 0 | 0 | 0 |
| Net requirement | 0 | 0 | 0 | 30 | 0 | 80 | 0 | 0 |
| Planned order receipt | 0 | 0 | 0 | 30 | 0 | 80 | 0 | 0 |
| **Planned order release** | 0 | 0 | **30** | 0 | **80** | 0 | 0 | 0 |

Week 4: 50 needed, 20 in stock, so 30 to be produced and released in week 3. Week 6: 80 needed, stock is zero, release in week 5.

#### Item B (LT = 2 weeks, on hand 40, receipt of 30 in week 2)
Gross requirement of B $= 2 \times 30 = 60$ in week 3 and $2 \times 80 = 160$ in week 5.

| Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|
| Gross requirement | 0 | 0 | 60 | 0 | 160 | 0 | 0 | 0 |
| Scheduled receipts | 0 | 30 | 0 | 0 | 0 | 0 | 0 | 0 |
| Projected on hand | 40 | 70 | 10 | 10 | 0 | 0 | 0 | 0 |
| Net requirement | 0 | 0 | 0 | 0 | 150 | 0 | 0 | 0 |
| Planned order receipt | 0 | 0 | 0 | 0 | 150 | 0 | 0 | 0 |
| **Planned order release** | 0 | 0 | **150** | 0 | 0 | 0 | 0 | 0 |

Week 3: available 70 against need 60, leaving 10. Week 5: need 160, stock 10, so net 150; the release is moved two weeks earlier to week 3.

**Answer: Release 30 units of A in week 3 and 80 in week 5; release 150 units of B in week 3.**

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. How is the net requirement of A in week 4 found, and what is it?
   A. 50 - 20 = 30 units
   B. 50 + 20 = 70 units
   C. 50 x 20 = 1000 units
   D. 50 units, since stock is ignored
   Answer: A. Net = gross - projected on hand = 50 - 20 = 30 units. (Key point: Net requirement rule)

2. Item A has a lead time of 1 week and needs 30 units received in week 4. When is the planned order released?
   A. Week 4
   B. Week 5
   C. Week 2
   D. Week 3
   Answer: D. Planned order release is the receipt moved earlier by the lead time: week 4 - 1 = week 3. (Key point: Release timing)

3. How is the gross requirement of component B obtained?
   A. Equal to the MPS quantity of A
   B. 2 x planned order releases of A (since each A needs 2 B)
   C. 2 x planned order receipts of B
   D. Equal to on-hand stock of B
   Answer: B. B's gross requirement comes from A's releases times 2: 60 in week 3 and 160 in week 5. (Key point: Dependent gross requirement)

4. What is the net requirement of B in week 5?
   A. 160 units
   B. 120 units
   C. 150 units
   D. 60 units
   Answer: C. Week 3 leaves 70 - 60 = 10 on hand; week 5 need 160 - 10 = 150, released 2 weeks earlier in week 3. (Key point: Net requirement of B)

## Related in Industrial Engineering and Management

- [Safety stock and reorder level with lead time](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_engineering_and_management%3Asafety-stock-and-reorder-level) — Industrial Engineering and Management, chapter 4
- [MRP compared with JIT](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_engineering_and_management%3Amrp-versus-jit-comparison) — Industrial Engineering and Management, chapter 5

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