Given the forecast and booked orders shown in the table,and a beginning inventory of 120,what is the MPS for period 4? The company operates with a lot size of 144.

Question

Quizplus · Accepted Answer

To calculate the MPS for period 4, we need to use the following formula:

MPS = Forecasted Demand - Booked Orders - Beginning Inventory

For period 4, the forecasted demand is 360, the booked orders are 288 (Lot size of 144, so two orders of 144 can be fulfilled), and the beginning inventory is 120.

Therefore, MPS = 360 - 288 - 120 = -48

Since the MPS is negative, this means that we don't need to produce any units for period 4. However, to maintain the lot size of 144, we can produce 144 units and store them in inventory for future periods. Therefore, the best choice is to produce 144 units for period 4, which is option B.

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