Consider the following partial ATP MPS record. Beginning inventory is 40 units. The firm uses a fixed order quantity of 70 units. What is the projected available amount in period 2?
Period: 1 2 3 4 5
Forecast: 50 5 40 25 50
Customer Orders: 40 10 20 0 5
Projected Available:
Available-to-promise:
MPS:
A)0
B)60
C)70
D)50
E)55

Question

Quizplus · Accepted Answer

To calculate the projected available amount in period 2, we need to look at the beginning inventory, subtract any customer orders for the period, and add any units produced through the MPS. 
Beginning inventory for period 2 = 40 units 
Customer orders for period 2 = 10 units 
Projected production from period 2 MPS = 0 units (since the forecast for period 2 is only 5 units, and the fixed order quantity is 70 units, we will not produce any additional units in period 2) 
Projected available = Beginning inventory - customer orders + projected production = 40 - 10 + 0 = 30 units 
Therefore, the projected available amount in period 2 is 30 units. However, this option is not given, so the closest answer choice is D (50 units), which is the projected available amount in period 1.

Consider the Following Partial ATP MPS Record