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6 February, 20:42

A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. An MPS quantity of 100 units is planned to arrive in period 3. Customer orders are 24 for period 1,18 for period 2, and 15 for period 3. What quantity is available for commitment to new customers prior to the receipt of the MPS quantity in week 3?

A. 32

B. 12

C. 20

D. 14

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Answers (1)
  1. 6 February, 21:43
    0
    correct option is D. 14

    Explanation:

    given data

    on hand inventory = 56 units

    Forecast Weekly demand = 20 units

    Period 1 orders P1 = 24 units

    Period 2 orders P2 = 18 units

    Period 3 orders P3 = 15 units

    to find out

    what quantity is available for commitment to new customers prior to the receipt of the MPS quantity in week3

    solution

    we get here Quantity before receipt of MPS in week 3 is express as

    Quantity required = Beginning on hand inventory - Orders fulfilled till period 2 end ... 1

    here Orders fulfilled till period 2 end = Period 1 orders + Period 2 orders ... 2

    Orders fulfilled till period 2 end = 24 + 18

    Orders fulfilled till period 2 end = 42 units

    so from equation 1 we get

    Quantity required = 56 - 42

    Quantity required = 14 units

    so correct option is D. 14
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