Question

Toyota Inc. makes a family of two sport cars, Models A and B. It bases its production planning in weeks. Opening inventory for the family is 500 units, and the plan is to reduce that to 300 units or less by the end of the month. The MPS is made using weekly periods. There are 4 weeks in this month. Statistically, 1/3 of the family forecast is driven by Model A and 2/3 by Model B. The forecast for the family is as follows:

Week	1	2	3	4	Total
Forecast	300	350	300	250	1200

          The lot sizing policy for Model A is 150 units and has a safety stock of 40 units. There are 150 units on hand of Model A. The lot size is 100 units and a safety stock of 50 units for Model B. There are 350 units on hand for Model B. Actual customer orders were provided.

1. (20 points). Complete the MPS records:

Model A:

Week	1	2	3	4
Forecast
Customer Orders	120	95	0	85
PAB
ATP
MPS

Model B:

Week	1	2	3	4
Forecast
Customer Orders	260	80	195	100
PAB
ATP
MPS

2. (3.75 points). Could the inventory target of 300 units be reached based on your production plan? Justify your answer.

3. (3.75 points). For Model B, an order for 90 units was requested to be added in week 1. Do you accept that order? Why? Justify your answer.

Answer 1

a)

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b)

Based on the production plan, PAB for the family at the end of 4 weeks = 178+90 = 268

Therefore, inventory target of 300 units could not be reached

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c)

ATP for model B in week 1 is 90. So, order for 90 units can be added in week 1.

Yes, we accept the order.