Question

XYZ Enterprises needs to schedule operations for the next six months. Create a Master Schedule including calculating Available-to-Promise (ATP) Inventory for each time period in the scheduling horizon using the following information:
Beginning Inventory of 60 units; Forecasted Demand of 40 units per period; Standard Production Quantity of 50 units, and confirmed Customer Orders of 42 units for Month 1, 35 units for Month 2, 10 units for Month 3, and 5 units for Month 4.

Answer 1

There are two types ATP calculations.

Push Based ATP & Pull based ATP.

Following is the calculation of considering Pull based ATP.

Pull-based ATP = Beginning Inventory + Production - Demand*

*where demand includes only confirmed orders but does not include forecasted demand (as forecast is not considered as committed demand)

ATP of the previous period becomes the Beginning Inventory of the next period.

Using this formula,

	Month 1	Month 2	Month 3	Month 4
Beginning Inventory	60	68	83	123
Production	50	50	50	50
Forecasted Demand	40	40	40	40
Confirmed Orders	42	35	10	5
Available to Promise (ATP)	68	83	123	168