We are preparing a master production schedule for a given item. For this item the demand...

We are preparing a master production schedule for a given item. For this item the demand forecast and booked orders are as follows:

Week	1	2	3	4	5	6
Demand Forecast	60	60	80	80	80	50
Booked Orders	58	63	52	20	4	0

Our Week 0 projected on-hand is 132 units. Lead time for this item is 2 weeks, and the order policy for this item is a fixed quantity of 180 units. When this master schedule is complete, what will be the projected on-hand in Week 6?

Expert Solution

Please find below the filled up MRP table as per data provided:

Lead time of delivery ( i.e. phase lag between quantity received and quantity released ) = 2 weeks

Fixed order Quantity = 180

WEEK	1	2	3	4	5	6
Booked Order	58	63	52	20	4	0
Projected on hand:132	132	74	11	139	119	115
Ending Inventory	74	11	139	119	115	115
Quantity received	0	0	180	0	0	0
Quantity Released	180	0	0	0	0	0

Here Ending Inventory for a period = Projected on hand for that period – Booked order for that period

Whenever , Projected on hand for a period < Booked order for that period, fixed order quantity of 180 is triggered. Thus an order quantity of 180 is received in week 3 for which order is released in week 1

Ending inventory for a period will feature as Projected on hand inventory for next period

Accordingly, Projected On hand inventory for Week 6 will be 115

PROJECTED ON HAND INVENTORY FOR WEEK 6 WILL BE 115

keosha answered 2 years ago

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