Question

In: Operations Management

An end item’s demand forecasts for the next 6 weeks are 30 units, followed by forecasts...

An end item’s demand forecasts for the next 6 weeks are 30 units, followed by forecasts of 25 units for weeks 7 through 10. The current on-hand inventory is 60 units. The order policy is to produce in lots of 80. The booked customer orders for the item, starting with week 1, are 22, 30, 15, 11, 0, 0, 9, 0, 0, and 0 units. The lead time is 2 weeks.

  1. Develop an MPS for this end item.
  2. The marketing department has received six orders for this item in the following sequence:

Order 1 is for 40 units to be delivered in period 3

Order 2 is for 60 units to be delivered in period 4

Order 3 is for 35 units to be delivered in period 6

Order 4 is for 30 units to be delivered in period 3

Order 5 is for 20 units to be delivered in period 5

Order 6 is for 75 units to be delivered in period 9

Assuming that the prospective MPS you developed in part (a) does not change, which orders would you be able to accept based on the available to promise (ATP)?

Solutions

Expert Solution

A) Steps :

1. Write forecast and actual order for each correspong week

2. Opening Inventory for 1st period is given and for subsequent periods is equal to the ATP of its previous period

3. Requirement = Maximum value out of Forecast and actual order

5. Net Inventory before Production (NIBP) = Opening Inventory - Requirement

6. MPS = 0 (if NIBP <=0) or = 80, i.e the lot size

7. Project Inventory = MPS + Opening Inventory - Requirement [All of the same time period]

8. Avaialble to Promise(ATP) = Opening Inventory +MPS - Actual Order

B) Only order 5 can be fulfilled as we have extra capacity to fulfill the order as the the schedule prepared earlier.

keosha answered 2 years ago
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