Consider the following partial 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 3?

A)45
B)15
C)70
D)50
E)155

Question

Consider the following partial 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 3?

A)45 
B)15 
C)70 
D)50 
E)155

Quizplus · Accepted Answer

To calculate the projected available amount in period 3, we need to calculate the projected inventory at the end of period 2 and subtract the fixed order quantity from it. 
Projected inventory at the end of period 2: 
Beginning inventory (40) + scheduled receipts (50) - demand in period 2 (5) = 85 
Projected available amount in period 3: 
Projected inventory at the end of period 2 (85) - fixed order quantity (70) = 15

Consider the Following Partial MPS Record