Question

Given the following information, complete the planned order releases and projected on-hand balances for component part X.

Part X		Week 1	Week 2	Week 3	Week 4	Week 5
Gross Requirements		80	0	90	0	90
Scheduled Receipts		60
Projected Balance	120
Planned Order Releases

Q = 60, LT = 3 weeks, Safety Stock = 5

Answer 1

We have following information-

· Q = 60 means Planned Order Release could be in multiple of 60 only

· LT = 3 weeks, means lead time is 3 weeks so Planned Order Release should be 3 weeks before the requirements

· Safety Stock = 5 means the Projected Balance cannot go below 5 at any point of time

Now complete the planned order releases and projected on-hand balances for component part X -

Party X		Week 1	Week 2	Week 3	Week 4	Week5
Gross requirement		80	0	90	0	90
Scheduled receipts		60	0	0	0	0
Projected Balance	120	100	100	10	10	40
Planned Order Release		0	120	0	0	0

Explanation:

Projected Balance for week 1 = Initial projected balance + scheduled receipts for week 1 – gross requirement for week 1

= 120 + 60 – 80 = 100

Projected Balance for week 2 = Projected balance for week 1 + scheduled receipts for week 2 – gross requirement for week 2

= 100 + 0 – 0 = 100

Projected Balance for week 3 = Projected balance for week 2 + scheduled receipts for week 3 – gross requirement for week 3

= 100 + 0 – 90 = 10

Projected Balance for week 4 = Projected balance for week 3 + scheduled receipts for week 4 – gross requirement for week 4

= 10 + 0 – 0 = 10

Projected Balance for week 5 = Projected balance for week 4 + scheduled receipts for week 5 – gross requirement for week 5 + Planned Order Release in week 2

= 10 + 0 – 90 + 120 = 40

For Planned Order Release; we can see in the above table that for week 5, if there is no receipts, the projected balance will be negative therefore there should be Planned Order Release 3 weeks before (in week 2). As the required quantity is more than 60 for week 5, therefore Planned Order Release will be 2 * 60 = 120 in week 2.