PRODUCT STRUCTURE DIAGRAM

BOM RK1-720

RK1-720

721A-12 IS-720(1)

BOM 34-720

34-720(1)

722-1(1) 721A-12(1) IS-720(1) 34-850(2)

722-1-000(1)

Description - 3/4" 720w/BV

INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
34-720(level 0) Y 5 2005 5 5 2006
Gross Requirement   5000 5000 5000 4000 4000
Scheduled Receipt 0 0 0 0   0
Projected on Hand 9600 4600 -400 0 0 0
Net Requirements -9600 0 400 5000 4000 4000
Planned Order Receipts     400 5000 4000 4000
Planned Order Realeases     400 5000 4000 4000
 Description - Repair Kit,1/2"-1"720
INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
RK1-720(level 0) Y 5 2005 5 5 2006
Gross Requirement   517 662 578 650 858
Scheduled Receipt 0 0 0 0 0 0
Projected on Hand 482 0 0 0 0 0
Safety Stock 400 400 400 400 400 400
Availability on Hand 82 -435        
Net Requirements -482 435 662 578 650 858
Planned Order Receipts   435 1062 978 1050 1258
Planned Order Realeases   435 1062 978 1050 1258

Description - Body 3/4",720 finished

INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
722-1 (Level 1 ) Y 5 2005 5 5 2006
Gross Requirement     400 5000 4000 4000
Scheduled Receipt 0 0 0 0 0 0
Projected on Hand 16650 16650 16250 11250 7250 3250
Net Requirements -16650 0 0 0 0 0
Planned Order Receipts            
Planned Order Realeases   0 0 0 0 0

Description - Plastic Washer,1/2"

INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
721A-12 (Level 1) Y 5 2005 5 5 2006
Gross Requirement   11564 11552 14198 11188 10764
Scheduled Receipt   55000 0 0 0 0
Projected on Hand 18533 61969 50417 36219 25031 14267
Projected on Hand - Safety
Stock 9533 52969 41417 27219 16031 5267
Net Requirements   0 0 0 0 0
Planned Order Receipts            
Planned Order Realeases            

Description -Ball Valve 3/4"

INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
34-850 (Level1) Y 5 2005 5 5 2006
Gross Requirement   50 850 10050 8040 8040
Scheduled Receipt   0 0 0 0 0
Projected on Hand 10430 10380 9530 -520 0 0
Net Requirements -10430 0 0 520 8040 8040
Planned Order Receipts       11444   11444
Planned Order Realeases   11444   11444    

Description -Instruction Sheet 720

IS720 (Level1) INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
 Y 5 2005 5 5 2006
Gross Requirement   13235 13502 14478 11580 11758
Scheduled Receipt   49500 49500 54900 9000 12600
Projected on Hand 64372 100637 136635 177057 174477 175319
Projected on Hand-Safety
Stock 64345 100610 136608 177030 174450 175292
Net Requirements   0 0 0 0 0
Planned Order Receipts            
Planned Order Realeases            

Description - Body 3/4",720 raw

INVENTOR 8/29/200 10-03- 10/31/200 11/28/200 01-02-
722-1-000(Level 2) Y 5 2005 5 5 2006
Gross Requirement   0 0 4021 5409 4928
Scheduled Receipt   0 0 0 0 0
Projected on Hand 612 612 612 -3409 0 0
Net Requirements -612     3409 5409 4928
Planned Order Receipts       56413    
Planned Order Realeases     56413      

Recommended Changes:

1. As Gerpheide, I recommend addressing the issue of high inventory costs for Item 34-850 by reducing the
lead time in order to decrease the amount of inventory held. Inventory holding cost is also very high
because the lead time is of 2 months and hence the inventory bulk-up over time.
2. The inventory for items 1S720 and 722-1 is causing concern as the forecasted stock on hand is enough to
last for the next five months, but the regular monthly deliveries are substantial and contribute to an
accumulation of inventory. This results in rising inventory expenses, which were already high in the first
month. To address this issue, it is suggested to decrease the inventory levels and adjust the planned
deliveries/batch orders accordingly.
3. Item 722-1-000 & 721A-12 are also facing a problem with large lot order sizes which exceeds the gross
requirement by significant margin, leading to increased inventory holding costs. It is recommended to
reduce the lot order size significantly.
4. Adjust the lot order and safety stock based on the screening of defective items at the beginning of the
process.