Vered works in the planning department of Preston Brass Company, which manufactu
ID: 360252 • Letter: V
Question
Vered works in the planning department of Preston Brass Company, which manufactures brass bathroom and kitchen fixtures. She has derived the following MPS for PBC’s Model 317 for the next six weeks.
a. Complete the following time-phased record: Model 317 Forecast Orders Available ATP MPs Week 1 2 3 4 5 6 T65 55 40 T 25 T 20 | 30 (60 40 50 1510 | 55 0 -40 -75 -95 (o 0 10 10 10 b. There are additional orders. Update the MPS time-phased record. At this time, the company requires a safety stock of 15 units. Week 2: 10 units Week 3: 5 units Week 4: 5 units Week 5: 210 units c. When is the earliest time the company can promise an additional order for 80 units?Explanation / Answer
a.
Master Production Schedule:
Model 317
Lot Size: 120
Inventory on hand = 10.
Week
1
2
3
4
5
6
Forecast
65
55
40
25
20
30
Orders (committed)
60
40
50
15
10
0
Projected on-hand inventory
65
10
80
55
35
5
MPS
120
0
120
0
0
0
ATP
30
0
55
0
0
0
Table for calculating Projected on-hand inventory and MPS:
Week
Inventory from Earlier Week
Reqmts.
(Greater of Forecast and Customer orders every week)
Net Inventory prior to MPS
MPS
(= 70 units)
Projected on-hand inventory
1
10
65
-55
+ 120 =
65
2
65
55
10
10
3
10
50
-40
+ 120 =
80
4
80
25
55
55
5
55
20
35
35
6
35
30
5
5
Projected on-hand inventory = Inventory from earlier week – Current week’s requirements + MPS.
Projected on-hand inventory for week 1 = 10 – 65 + 120 = 65.
Projected on-hand inventory for week 2 = 65 – 55 + 0 = 10.
Similarly, Projected on-hand inventory is calculated for the remaining weeks.
ATP Calculations:
ATP (using “look-ahead” procedure) for week 1 = On-hand inventory + MPS – (Sum of actual orders) = 10 + 120 – (60 + 40) = 30.
Then we calculate ATP only for those weeks having MPS quantity. i.e., week 3.
After week 1, there is no need of on-hand inventory.
ATP for week 3 = MPS - (Sum of actual orders) = 120 – (50 + 15) = 55.
b.
Master Production Schedule:
Model 317
Lot Size: 120
Inventory on hand = 10
Safety Stock = 15 units
Week
1
2
3
4
5
6
Forecast
65
55
40
25
20
30
Orders (committed)
60
50
55
20
220
0
Projected on-hand inventory
65
130
75
50
70
40
MPS
120
120
0
0
240
0
ATP
20
15
0
0
20
0
Table for calculating Projected on-hand inventory and MPS:
Week
Inventory from Earlier Week
Reqmts.
(Greater of Forecast and Customer orders every week)
Net Inventory prior to MPS
MPS
(= 70 units)
Projected on-hand inventory
1
10
65
-55
+ 120 =
65
2
65
55
10
+ 120 =
130
3
130
55
75
75
4
75
25
50
50
5
50
220
-170
+ 240 =
70
6
70
30
40
40
Projected on-hand inventory = Inventory from earlier week – Current week’s requirements + MPS.
Projected on-hand inventory for week 1 = 10 – 65 + 120 = 65.
Projected on-hand inventory for week 2 = 65 – 55 + 120 = 130.
Similarly, Projected on-hand inventory is calculated for the remaining weeks.
ATP Calculations:
ATP (using “look-ahead” procedure) for week 1 = On-hand inventory + MPS – (Sum of actual orders) = 10 + 120 – (60 + 50) = 20.
Then we calculate ATP only for those weeks having MPS quantity. i.e., weeks 2 and 5.
After week 1, there is no need of on-hand inventory.
ATP for week 2 = MPS - (Sum of actual orders) = 120 – (50 + 55) = 15.
ATP for week 5 = MPS - (Sum of actual orders) = 240 – (220 + 0) = 20.
c. The earliest time by which the company can promise an additional order for 80 units = Week 3 (since the Projected on-hand inventory for week 2 = 130 units).
Model 317
Lot Size: 120
Inventory on hand = 10.
Week
1
2
3
4
5
6
Forecast
65
55
40
25
20
30
Orders (committed)
60
40
50
15
10
0
Projected on-hand inventory
65
10
80
55
35
5
MPS
120
0
120
0
0
0
ATP
30
0
55
0
0
0
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