Given the forecast and booked orders shown in the table,and a beginning inventory of 25,what is the master production schedule quantity for period 4?

Question

Quizplus · Accepted Answer

To find the master production schedule quantity for period 4, we need to calculate the total demand for period 4, which is the forecasted demand plus the booked orders. 
Total Demand for Period 4 = Forecasted Demand Period 4 + Booked Orders Period 4 
= 40 + 15 
= 55 
In addition to that, we need to subtract the ending inventory of period 3 from the total demand of period 4 to get the net demand for period 4. 
Net demand for Period 4 = Total Demand Period 4 - Ending Inventory Period 3 
= 55 - 20 
= 35 
Therefore, the master production schedule quantity for period 4 would be 55 (total demand) + 10 (desired ending inventory) - 25 (beginning inventory) - 25 (scheduled receipts) - 20 (ending inventory period 3) = 55 - 80 = -25. Since it's not possible to have negative production, we would need to adjust the production plan accordingly for period 4.

Given the Forecast and Booked Orders Shown in the Table,and