Can someone please go through the steps and explain to how to do this problem? I
ID: 381894 • Letter: C
Question
Can someone please go through the steps and explain to how to do this problem? I already have the answer, I just don't know how to do the problem.
A firm has 56 units of product X on hand. Forecasts of demand are 20 units per week and the customer order information is given below. Determine MPS schedule with a lot size of 50. The MPS rule is to schedule production when net inventory before production is less than 10.
Week#
Beg. Inv _____
1
2
3
4
5
Forecast
20
20
20
20
20
Customer Orders
(Committed)
24
18
15
30
15
Requirements
Net Inv. Before MPS
MPS ( _____ )
Projected Inventory
Available-to-Promise Inventory (ATP)
Week#
Beg. Inv _____
1
2
3
4
5
Forecast
20
20
20
20
20
Customer Orders
(Committed)
24
18
15
30
15
Requirements
Net Inv. Before MPS
MPS ( _____ )
Projected Inventory
Available-to-Promise Inventory (ATP)
Explanation / Answer
Requirement = Max(Forecast,Customer orders)
Net inventory before MPS = Previous period project inventory + Beginning inventory
ATP = MPS - next week commited orders - current week committed orders
For week 1 while calculating ATP, instead of MPS, beginning inventory will be considered
So, ATP of Week 1 = 56-24-18 = 14
Projected inventory = Net inventory before MPS - Requirement + MPSRequirement = Max(Forecast,Customer orders)
Net inventory before MPS = Previous period project inventory + Beginning inventory
MPS is done when Net inventory before MPS - Requirement < 10ATP = MPS - next week commited orders - current week committed orders
For week 1 while calculating ATP, instead of MPS, beginning inventory will be considered
So, ATP of Week 1 = 56-24-18 = 14
Beg. Inv 56 1 2 3 4 Forecast 20 20 20 20 20 Customer Orders 24 18 15 30 15 (Committed) Requirements 24 20 20 30 20 Net Inv. Before MPS 56 32 12 42 12 MPS ( 50 ) 0 0 50 0 50 Projected Inventory 32 12 42 12 42 14 0 Available-to-Promise Inventory (ATP) 5 0 35