9. Given the following information shown below, what is the projected on-hand in
ID: 365379 • Letter: 9
Question
9. Given the following information shown below, what is the projected on-hand inventory at the end of week 4? The MPS rule is to schedule production if the projected on-hand inventory at the end of a week would be negative without it. Use a fixed production lot-size of 75 units. Note, there is no beginning inventory for week one and you have been provided the demand forecasts and currently booked (committed) customer orders as shown below. Week Forecast Customer Orders Projected On-Hand (0) MPS 50 50 50 50 52 35 20 12 a. 23 units b. 25 units c. 48 units d. 50 units e. 75 units f. some other value 10. Given the following information shown below, what is the available to promise (ATP) inventory at the end of week 1? The MPS rule is to schedule production if the projected on-hand inventory at the end of a week would be negative without it. Use a fixed production lot-size of 100 units. Note, there is a beginning inventory for week one of 30 units and you have been provided the demand forecasts and currently booked (committed) customer orders as shown below. Week Forecast Customer Orders Projected On-Hand (30) MPS Avail to promise (ATP) 40 40 30 30 42 39 32 15 a. -13 units b.-1 0 units c. 2 unitsd. 17 units e. 20 units f.some other valueExplanation / Answer
Part 9:
1. Determine the Week requirement, which is equal to maximum among forecast or customer requirements.
2. Determine MPS quantity:
MPS quantity is ordered when projected on-hand inventory becomes negative.
Projected on-hand (POH) or net inventory before MPS = previous week inventory – Week requirements
For week 1, POH = 0 – 52 = -52
MPS quantity should satisfy this net inventory before MPS. Here, the lot size is 100 units. Thus, MPS quantity = 100 units.
Ending inventory or projected on-hand will change to:
Projected on-hand after MPS = Previous week Inventory + MPS – Week Requirements
For week 1, projected on-hand after MPS = 0 + 100 – 52 = 48 units
Similar computation is done for determining MPS and POH as follows:
Period
1
2
3
4
A
Forecasted Sales
50
50
50
50
B
Customer Orders
52
35
20
12
C = MAX (A,B)
Week Requirement
52
50
50
50
D
Beginning Inventory
0
23
48
73
F = D-C
Net Inventory Before MPS
-52
-27
-2
23
G
MPS
75
75
75
0
H=G+D-C
Ending Inventory/Project On-Hand
23
48
73
23
Ans: Projected On-hand Inventory at the end of week 4 = 23 units
Correct Option: a. 23
Part 10:
Period
1
2
3
4
A
Forecasted Sales
40
40
30
30
B
Customer Orders
42
39
32
15
C = MAX (A,B)
Week Requirement
42
40
32
30
D
Beginning Inventory
30
88
48
16
F = D-C
Net Inventory Before MPS
-12
48
16
-14
G
MPS
100
0
0
100
H=G+D-C
Ending Inventory/Project On-Hand
88
48
16
86
Determine available-to-promise:
Available-to-promise (ATP) is the quantity that is available after satisfying the customer requirement till next MPS is scheduled.
For week 1, , ATP = Previous week inventory + MPS of the week – Sum of Customer Orders till the week MPS is scheduled
ATP for week 1 = 30 + 100 – (42 + 39 + 32) = 17 units
Beyond Week 1, ATP = MPS of the week – Sum of Customer Orders till the week MPS is scheduled
ATP for week 4 = 100 – (15) = 85 units
ATP for week 4 = 500 – (268+275) = -43 units
Period
1
2
3
4
Forecasted Sales
40
40
30
30
Customer Orders
42
39
32
15
Proj-on-hand (30)
30
ATP
17
85
MPS
100
100
ANS: d. 17
Period
1
2
3
4
A
Forecasted Sales
50
50
50
50
B
Customer Orders
52
35
20
12
C = MAX (A,B)
Week Requirement
52
50
50
50
D
Beginning Inventory
0
23
48
73
F = D-C
Net Inventory Before MPS
-52
-27
-2
23
G
MPS
75
75
75
0
H=G+D-C
Ending Inventory/Project On-Hand
23
48
73
23
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