Tabard Industries forecasted the following demand for one of its most profitable
ID: 457680 • Letter: T
Question
Tabard Industries forecasted the following demand for one of its most profitable products for the next 8 weeks: 140,140,140,100,100,100, 80, and 80 units. The booked customer orders for this product, starting in week 1 are: 90, 70, 50, 40, 30,10, 0, and 0 units. The current on-hand inventory is 200 units, the order quantity is 200 units, and the lead time is one week. Develop a MPS for this product. (Enter your responses as whole numbers. A response of "0" is equivalent to being not applicable.)Explanation / Answer
To obtain the MPS order following steps is repeated for each week.
1.calculate Gross requirement for each week = Forecast (1) + Customer orders (2)
2. Obtain the opening inv. which is equal to projected on-hand of previous period. For first week opening inventory = 200 units.
3. Calculate difference or actual requirement by subtracting (3) from (4), if the difference is negative then place the order of 200 units for the given week as per order policy. For example difference for week 1 is -30, so place order of 200 units. MPS quantity for week 1 is 200 units.
4. Now calculate projected on-hand or ending inventory of the week by adding difference (5) and MPS quantity (7). Or it can be calculated as follows:
Projected on-hand = MPS quantity + Opening inv. – Gross requirement
In week 4 the difference in positive, thus no order is placed in this week.
Week
1
2
3
4
5
6
7
8
1
Forecast
140
140
140
100
100
100
80
80
2
Customer orders
90
70
50
40
30
10
0
0
3
gross req. (1+2)
230
210
190
140
130
110
80
80
4
opening inv.
200
170
160
170
30
100
90
10
5
Difference (4-3)
-30
-40
-30
30
-100
-10
10
-70
6
Projected on-hand
(7+5)
170
160
170
30
100
90
10
130
7
MPS quantity
200
200
200
0
200
200
0
200
Week
1
2
3
4
5
6
7
8
1
Forecast
140
140
140
100
100
100
80
80
2
Customer orders
90
70
50
40
30
10
0
0
3
gross req. (1+2)
230
210
190
140
130
110
80
80
4
opening inv.
200
170
160
170
30
100
90
10
5
Difference (4-3)
-30
-40
-30
30
-100
-10
10
-70
6
Projected on-hand
(7+5)
170
160
170
30
100
90
10
130
7
MPS quantity
200
200
200
0
200
200
0
200
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.