1. An operations planner, Lovell Bradley, is developing a sales and operations p

Question

1. An operations planner, Lovell Bradley, is developing a sales and operations plan that involves backorders. The company's demand and production rates for the next six periods are as follows x=47 PeriodDemand Production 8,000 10,000 - 2X8,000 8,200 6,600 + 2X8,200 510,000 - 2X8,600 7,800 8,000 + 2X 7,000 X 4 8,000 + X Beginning inventory at the start of period 1 is "2X" units. Calculate beginning inventory, ending inventory, average inventory, and the backorder amount, if any, for each of the next six periods. Period: 3 4 Beginning Inventory Production Demand Ending Inventory Average Inventory* Backorders

Explanation / Answer

Beginning inventory = previous period ending inventory

Ending inventory = MAX(0, Beginning inventory + Production - Demand - Previous period backorders)

Average inventory = (Beginning inventory + Ending inventory)/2

Backorder amount = MAX(0, Demand + Previous period backorders - Beginning inventory - Production)

Period 1 2 3 4 5 6 Beginning inventory 94 0 0 0 0 659 0 Production 8,000 8,000 8,200 8,200 8,600 7,800 Demand 8,094 9,906 7,047 6,694 9,906 8,047 Ending inventory 0 0 0 659 0 0 Average inventory 0 0 0 330 330 0 Backorders 94 2,000 847 0 647 894

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