Question
Please answer the following question:
The forecast for each week of an four-week schedule is 50 units. The MPS rule is to schedule production if the projected on-hand inventory would be negative without it. Customer orders (committed) are follows: Use a production lot size of 75 units and no beginning inventory. Determine the available-to-promise (ATP) quantities for each period.
Explanation / Answer
Beginning Inventory = 0 MPS Table Week Period 1 2 3 4 Forecast demand 50 50 50 50 Customer orders booked 52 35 20 12 Projected on-hand inventory 23 48 73 23 Master schedule (Note1) 75 75 75 0 Available to promise -12 43 63 0 Projected on-hand inventory For Period 1 = Beginning Inventory + MPS for that period - Max of Forecast or Customer orders For Subsequent periods = Projected on-hand inventory + MPS for that period - Max of Forecast or Customer orders Available to promise For Period 1 = Beginning Inventory + MPS for that period - Customer Order for Current and Next periods For Subsequent periods = If MPS>0, MPS for that period - Customer Order for subsequent two periods For MPS = 0, ATP = 0 MPS Calculation (note 1) Projected On hand before MPS Week 1 0 - Max(50,52) = -52 Hence, MPS = 75, as Projected < 0 2 23 - Max(50,35) = -27 Hence, MPS = 75, as Projected < 0 3 48 - Max(50,20) = -2 Hence, MPS = 75, as Projected < 0 4 73 - Max (50,12) = 23 Hence, MPS = 0, as Projected is not < 0