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Operations Management: An Integrated Approach, 5th Edition by Nada R. Sanders, R. Dan Reid

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Solved Problems

(See student companion site for Excel template.)

• Problem 1

Complete the following MPS records. The beginning inventory is 20 units and the order quantity is an FOQ = 50 units in part (a) and a POQ = two periods in part (b).

Before You Begin:

This problem compares two different replenishment policies, an FOQ = 50 units with a POQ = two periods. Calculate the projected available quantity to determine when a replenishment order is needed. When the projected available quantity is negative, a replenishment order is needed in that period. Note that different policies can have orders due in different periods. The number of orders and the inventory levels can vary based on replenishment policy.

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Solution a

Begin by calculating the projected available quantities. At the end of period 1, the projected available should be 0 (20 units of beginning inventory less 20 units forecasted demand). If no order is received, the projected available row is negative at the end of period 2. When this row turns negative, we need a replenishment order for that period. The replenishment order in this case is 50 units. The updated MPS record is shown in Table D-17.

When spreadsheeting this problem, you can include a conditional statement to check whether the projected available quantity ...

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