Consider the following partial MPS record. Beginning inventory is 80 units. When should the first MPS shipment be scheduled?

A)period 1
B)period 2
C)period 3
D)period 4
E)period 5

Question

Consider the following partial MPS record. Beginning inventory is 80 units. When should the first MPS shipment be scheduled?

A)period 1 
B)period 2 
C)period 3 
D)period 4 
E)period 5

Quizplus · Accepted Answer

To determine when the first MPS shipment should be scheduled, we need to look at when the projected available inventory dips below the safety stock level (assuming there is one). The projected available inventory for period 1 is 80 units (beginning inventory) + 60 units (forecasted demand) - 0 units (MPS) = 140 units. The projected available inventory for period 2 is 140 units (projected available inventory from period 1) + 5 units (forecasted demand) - X units (MPS) = 135 - X units (where X is the number of units in the MPS).

The safety stock level is unknown, but assuming a safety stock level of zero, the projected available inventory in period 2 is still positive. However, in period 3, the projected available inventory drops to 105 units (projected available inventory from period 2) + 30 units (forecasted demand) - Y units (MPS) = 135 - Y units (where Y is the number of units in the MPS). Therefore, the first MPS shipment should be scheduled for period 3 to avoid stockouts.

Consider the Following Partial MPS Record