CMA Intermediate · Operations Management and Strategic Management · Operations Planning
In a Master Production Schedule (MPS) for a product, the opening inventory is 40 units. Forecast demand is 50 units per week and customer orders booked are 60 for week 1 and 30 for week 2. Production lot size is 100 units. Using the rule that the greater of forecast and customer orders is used as demand, in which weeks is the MPS quantity of 100 scheduled for the first two weeks?
The MPS lot of 100 is needed in week 1 only. Week 1 demand is 60, which exceeds the opening stock of 40, so a lot is released and inventory becomes 80. Week 2 demand of 50 leaves 30, so no further lot is required.
- AWeek 1 onlyCorrect
- BWeek 2 only
- CBoth week 1 and week 2
- DNeither week
Explanation
Week 1 demand is max(50,60)=60. Projected inventory 40-60 = -20, so an MPS of 100 is needed, giving 80. Week 2 demand is max(50,30)=50; 80-50=30, which is not negative, so no new lot. Using only forecast (50) in week 1 gives -10, also needing a lot, so the answer is the same. Week 1 only.
Did you get it right without looking?
One question tells you little. A timed set on Operations Planning shows your real accuracy, how long you take and where you lose marks.
More Operations Planning questions
- A manufacturer arranges its machines so that all lathes are in one section, all drilling machines in another and all milling machines in a t…
- A firm compares three sites for a plant using the factor rating method. Weights: labour availability 0.50, proximity to market 0.30, infrast…
- Which statement about capacity planning is correct?
- A plant in Pune has a design capacity of 1,000 units per day and an effective capacity of 800 units per day. Actual output is 640 units per …
- A Jaipur textile unit uses single exponential smoothing with alpha = 0.3. Its forecast for the last month was 200 units and the actual deman…
- In the hierarchy of operations planning, which decision is classified as a long-range (strategic) operations planning decision rather than a…