Question

3.15. Given the following data, calculate the projected available balance and the planned MPS receipts. The lot size is 100. The demand time fence is 2 weeks. 4 2 3 Week 50 50 50 50 Forecast 25 30 65 60 Customer Orders 60 Projected Available Balance MPS 312

is my solution correct?

Answer 1

Yes. The solution is correct. The calculations are as follows.

Week		1	2	3	4	Total
Forecast		50	50	50	50	200
Customer Orders		60	30	65	25	180
Projected Available Balance	60	0	70	5	55	130
MPS			100		100	200

The formulas used and steps for the calculations are as follows:

PAB = Prior period PAB or on-hand balance + MPS – Customer Orders

This PAB is before the demand time fence of 2 weeks. After 2 weeks, the PAB will be calculated using the following formula.

PAB for next periods = Prior PAB + MPS – customer orders or forecast whichever is greater

All calculations:

PAB for period 1: On-hand balance (inventory) is 60 units, and after satisfying the customer orders, the PAB is zero. To satisfy the demand for future products, the MPS is scheduled for lot size 100.

PAB for period 2 = 0 + 100 – 30 = 70

PAB for period 3 = 70 + 0 – 65 = 5

PAB for Period 4 = 5 + 100 – 50 = 55