Question

The forecast for each week is 50 units each week and customer orders are as shown in the table below. The beginning inventory level is 0 and the production lot size is 75. Determine Available-to-promise inventory under the condition that “schedule production when the projected on-hand inventory would be negative without production”.

	June				July
	1	2	3	4	1	2	3	4
Forecast	50	50	50	50	50	50	50	50
Customer order (committed)	52	35	20	12

Answer 1

First, calculate the Projected on-hand inventory (I_t) for a period-t using the following formula (keep production zero for all periods)-

Q_t = Production in period-t; G_t = forecast in period-t; O_t = committed orders in period-t

Next, fill the production amounts one-by-one for each period considering the lot size and looking at the projected inventory.

Finally, calculate ATP

For the first period, ATP = I₀ + Q₁ – the sum of orders before next MPS
For each subsequent period when a MPS occurs, ATP = Q_t – the sum of orders before next MPS.