Prepare a master schedule given this information: It is now the end of week 1; c
ID: 452544 • Letter: P
Question
Prepare a master schedule given this information: It is now the end of week 1; customer orders are 25 for week 2, 16 for week 3, 11 for week 4, 8 for week 5, and 3 for week 6. Use the MPS rule of ordering production when projected on-hand inventory would be negative without production. Suppose that a production lot size of 70 pumps is used. (Leave no cells blank - be certain to enter "0" wherever required.)
June
July
Prepare a master schedule given this information: It is now the end of week 1; customer orders are 25 for week 2, 16 for week 3, 11 for week 4, 8 for week 5, and 3 for week 6. Use the MPS rule of ordering production when projected on-hand inventory would be negative without production. Suppose that a production lot size of 70 pumps is used. (Leave no cells blank - be certain to enter "0" wherever required.)
Explanation / Answer
Master Schedule
Lot Size: 70
Inventory on hand = 64.
June
July
1
2
3
4
5
6
7
8
Forecast
30
30
30
30
40
40
40
40
Customer orders (committed)
33
25
16
11
8
3
0
0
Projected on-hand inventory
31
1
41
11
41
1
31
61
MPS
0
0
70
0
70
0
70
70
ATP
6
0
43
0
59
0
70
70
Table for calculating Projected on-hand inventory and MPS:
Week
Inventory from Earlier Week
Reqmts.
(Greater of Forecast and Customer orders every week)
Net Inventory prior to MPS
MPS
(= 70 units)
Projected on-hand inventory
1
64
33
31
31
2
31
30
1
1
3
1
30
-29
+ 70 =
41
4
41
30
11
11
5
11
40
-29
+ 70 =
41
6
41
40
1
1
7
1
40
-39
+ 70 =
31
8
31
40
-9
+ 70 =
61
Projected on-hand inventory = Inventory from earlier week – Current week’s requirements + MPS.
Projected on-hand inventory for week 1 = 64 – 33 + 0 = 31.
Projected on-hand inventory for week 2 = 31 – 30 + 0 = 1.
Similarly, Projected on-hand inventory is calculated for the remaining weeks.
ATP Calculations:
ATP (using “look-ahead” procedure) for week 1 = On-hand inventory + MPS – (Sum of actual orders) = 64 + 0 – (33 + 25) = 6.
Then we calculate ATP only for those weeks having MPS quantity. i.e., weeks 3, 5, 7 and 8.
After week 1, there is no need of on-hand inventory.
ATP for week 3 = MPS - (Sum of actual orders) = 70 – (16 + 11) = 43.
ATP for week 5 = MPS - (Sum of actual orders) = 70 – (8 + 3) = 59.
ATP for weeks 7 and 8 = MPS quantity = 70 (due to absence of customer order).
Lot Size: 70
Inventory on hand = 64.
June
July
1
2
3
4
5
6
7
8
Forecast
30
30
30
30
40
40
40
40
Customer orders (committed)
33
25
16
11
8
3
0
0
Projected on-hand inventory
31
1
41
11
41
1
31
61
MPS
0
0
70
0
70
0
70
70
ATP
6
0
43
0
59
0
70
70