Question

The​ S&OP team at Kansas​ Furniture, has received the following estimates of demand​ requirements:

The S&OP team at Kansas Furniture, has received the following estimates of demand requirements: July Aug. Sept. Dec. Oct. 1,900 Nov. 1,900 900 1,200 1,500 1,900 Assuming stockout costs for lost sales of $90 per unit, inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis: Plan C: Keep the current workforce steady at a level producing 1,200 units per month. Subcontract the remainder to meet demand at a $65 per unit premium cost. Assume that 200 units remaining from June are available in July. (Enter all responses as whole numbers.) Plan C Ending Inventory Demand Subcontract (Units) Production Month June July 200 900 1,200

Complete the table

Answer 1

Month	Demand
July	900
Aug	1200
Sept	1500
Oct	1900
Nov	1900
Dec	1900

Production is constant at 1200 per unit.

Subcontracting is for the remaining parts to meet the demand.

Month	Demand	Production	Subcontract (units)	Ending Inventory
June				200
July	900	1200	0	500
Aug	1200	1200	0	500
Sept	1500	1200	0	200
Oct	1900	1200	500	0
Nov	1900	1200	700	0
Dec	1900	1200	700	0

Explanation:

The ending inventory should be 0

Production is constant at 1200

If, production of current month + ending inventory of the previous month is less than the demand, the difference amount will be subcontracted. Else subcontract will be 0.

Ending Inventory is the difference between the (production of current month + ending inventory of previous month) and the demand of this month

(Assuming you have provided only the first row, I have completed the whole MRP table. If there is any other requirement, you may ask over comment)

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