Question

A company manufactures bookcases. In August (a four week month), they have a forecast of 66,800 units of a particular SKU. They start the month with 22,000 units on the shelf. This is the MPS grid for the first two weeks:

	April
22000	1	2	3	4
Forecast	16700	16700	16700	16700
Customer Orders	12000	14000	7000	4000
Projected on-hand	10550	14850
MPS	5250	21000

Safety stock for this item is 10,000 boxes. Production is in fixed lots of 5,250 boxes

What is the projected on hand in week 4?

Answer 1

Answer: steps for MPS

step 1	IOH=	PIOH of last week
step 2	Requirement=	D+SS-IOH	CO will be taken instead of D when CO>D
step 3	NR=	is equal to requirement (if requirement>0) OR 0 (if requirement is negative)
step 4	MPS=	more than or equal to NR in multiples of lot size
step 5	PIOH=	IOH+MPS-D	CO will be taken instead of D when CO>D

MPS

safety stock SS=	10000
Q = lot size=	5250
beginning inventory=	22000
Period	1	2	3	4
Demand	16700	16700	16700	16700
Customer orders CO	12000	14000	7000	4000
On-Hand Inventory IOH	22000	10550	14850	13900
Requirement	4700	16150	11850	12800
Net requirements NR	4700	16150	11850	12800
Master production schedule MPS	5250	21000	15750	15750
Projected On-Hand Inventory POHI	10550	14850	13900	12950

Projected On-Hand Inventory in week 4= 12950