Question

There are 200 units in inventory at the start of week 1. What are the net requirements in week 4 if there is a scheduled receipt of 100 units every other week and a two week production lead time?


1 2 3 4 5
Gross Requirements 550 450 400 400 500
Scheduled receipts 100 0 100 0 100
Projected ending Inventory
Net Requirements
Planned Receipts 350 450
Planned Orders 350 300

a. 250
b. 300
c. 350
d. 400

Answer 1

Answer:

a. 250

Explanation:

______________________ 1 _____ 2 _____ 3 _____ 4

Gross Requirements _____ 550 ___450 ____400 ___400

Scheduled receipts ______ 100 ____ 0 _____ 100 ___ 0  

Beginning Inventory _____ 200 ____100 ____ 100____150

Net Requirements  _______ 250____350____ 200____250

Planned Receipts ________350 ____450_____350 ___ 300

Projected Ending Inventory _100____ 100_____ 150____ 50

Planned Orders __________350 ___ 300_____300____ 0

The net requirement in week 4 is 250 units

Working

Formulas or calculations

Net Requirements = Gross requirements - Schedule receipts - Beginning Inventory

Projected Ending Inventory = PLanned receipt - Net requirements

Week 4

Net Requirements = Gross requirements - Schedule receipts - Beginning Inventory

PLacing values in the formula

Net Requirements = 400 - 0 - 150 = 250