A master production schedule shows the beginning inventory is 40 units,the forecast is 100 units,and actual customer orders are 80 units.What is the quantity that is available to promise in period 1?
A)40
B)80
C)100
D)60

Question

Quizplus · Accepted Answer

Available to promise (ATP) is the quantity that is promised to customers minus the quantity that has already been sold to customers. In this case, the promised quantity is the forecasted demand, which is 100 units. The quantity that has already been sold is the actual customer orders, which is 80 units. Therefore, the ATP for period 1 is 100 - 80 = 20 units. However, the question is asking for the quantity that is available to promise, which includes the beginning inventory. Therefore, the ATP is 20 + 40 = 60 units. The correct answer is D.

A Master Production Schedule Shows the Beginning Inventory Is 40