The MPS record below is based on the forecast at the beginning of period 1.However, at the beginning of period 2, the actual demand for period 1 was only 500 units.Which of the following correctly states the change in MPS as a result? The MPS can only be ordered in 500 unit intervals.
$$\begin{array} { | c | c | c | c | c | }
\hline \text { Periods } & 1 & 2 & 3 & 4 \
\hline \text { Forecast } & 1100 & 2000 & 300 & 150 \
\hline \text { Available } & 100 & 100 & 300 & 150 \
\hline \text { MPS } & 1000 & 2000 & 500 & \
\hline \text { On hand } & 200 & \multicolumn{2}{|l} { } \
\cline { 1 - 4 } & & &
\end{array}$$

Question

The MPS record below is based on the forecast at the beginning of period 1.However, at the beginning of period 2, the actual demand for period 1 was only 500 units.Which of the following correctly states the change in MPS as a result? The MPS can only be ordered in 500 unit intervals.
$$\begin{array} { | c | c | c | c | c | } 
\hline \text { Periods } & 1 & 2 & 3 & 4 \
\hline \text { Forecast } & 1100 & 2000 & 300 & 150 \
\hline \text { Available } & 100 & 100 & 300 & 150 \
\hline \text { MPS } & 1000 & 2000 & 500 & \
\hline \text { On hand } & 200 & \multicolumn{2}{|l} { } \
\cline { 1 - 4 } & & &
\end{array}$$

Quizplus · Accepted Answer

Since the actual demand for period 1 was only 500 units, the available inventory at the beginning of period 2 would be 200 + 100 (the MPS for period 1) - 500 (the actual demand for period 1) = -200 units. This means that there is not enough inventory to fulfill the original MPS for period 2, which was 2000 units. Therefore, the revised MPS for period 2 would be the sum of the remaining inventory from period 1 (which is 0 since it was negative) and the available inventory for period 2, which is 100 units. Thus, the revised MPS for period 2 will be 1000 (original MPS for period 2) - 0 (remaining inventory from period 1) + 100 (available inventory for period 2) = 1100 units. Therefore, the correct answer is C) The MPS for period 2 is 1500 units.

The MPS Record Below Is Based on the Forecast at the Beginning