Question

1) Complete the Table below.
2) Based on the completed table what is the largest additional order that could be accepted for delivery for the end of week 8?
		Order Policy =	450
		Beginning Inventory =	425
	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Forecast	460	400	440	420	400	465	410	425
Orders	350	425	400	435	410	325	250	175
Projected On-Hand
Master Production Schedule
Available-to-Promise

Answer 1

Steps of MPS and ATP:

1. Determine projected-on hand by formula:

Projected-on hand = Previous week inventory – maximum (forecast, orders)

If the POH is negative place MPS of 450 units, again revise the POH as follows:

POH of week = MPS + Previous week inventory – maximum (forecast, orders)

2. Determine Available-to-promise (ATP) ATP is the quantity that is available after satisfying the customer requirement. as follows:

For week 1: ATP = Beginning inventory + MPS of the week – Sum of Customer Orders till the week MPS is scheduled

ATP for week 1 = 6500 + 2640 – 9100 = 40

Beyond Week 1, ATP = MPS of the week – Sum of Customer Orders till the week MPS is scheduled

		Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8
Forecast		460	400	440	420	400	465	410	425
Orders		350	425	400	435	410	325	250	175
Projected On-Hand	425	425+450 – max(460,350) = 415	440	0	15	55	40	80	105
Master Production Schedule		450	450	0	450	450	450	450	450
Available-to-Promise		425+450 – 350 = 550	450-(425+400) = -375		450-435 = 15	450-410 = 40	125	200	275

At the end of week 8 maximum additional order quantity is 275 units