e are preparing a master production schedule for a given ite

e are preparing a master production schedule for a given item. For this item the demand forecast and booked orders are as follows:

Our Week 0 projected on-hand is 162 units. Lead time for this item is 1 week, and the order policy for this item is a fixed quantity of 300 units. In which weeks are arrival quantities required?

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week	1	2	3	4	5	6
Demand Forecast	80	80	60	60	50	50
Booked Orders	58	63	52	20	4	0

Solution

Please find below the filled up MRP table as per data provided:

Lead time of delivery ( i.e. phase lag between quantity received and quantity released ) = 1 week

Fixed order Quantity = 300

WEEK

1

2

3

4

5

6

Booked Order

58

63

52

20

4

0

Projected on hand:162

162

104

41

289

269

265

Ending Inventory

104

41

289

269

265

265

Quantity received

0

0

300

0

0

0

Quantity Released

0

300

0

0

0

0

Here Ending Inventory for a period = Projected on hand for that period – Booked order for that period

Whenever , Projected on hand for a period < Booked order for that period, fixed order quantity of 300 is triggered.

During week 3 , Projected on hand quantity of 41 < Booked order quantity of 52 which should trigger a new order with order quantity of 300. Thus an order quantity of 300 is received in week 3 for which order is released in week 2

Thus arrival quantity is required in week 3

ARRIVAL QUANTITY IS REQUIRED IN WEEK 3

WEEK	1	2	3	4	5	6
Booked Order	58	63	52	20	4	0
Projected on hand:162	162	104	41	289	269	265
Ending Inventory	104	41	289	269	265	265
Quantity received	0	0	300	0	0	0
Quantity Released	0	300	0	0	0	0