Given the following data, calculate the projected available balance and the planned MPS receipts. The lot size is 100. The demand time fence is 2 weeks.

Week 

1 

2 

3 

4 

Forecast 

50 

50 

50 

50 

Customer Orders 

60 

30 

65 

25 

Proected Available Balance      60 

 

Answer:

PAB= prior period PAB or on-hand balance + MPS - Customer orders

Therefore:

Week 1 MPS= 60-60 = 0

Week 1 PAB= 60+0-60= 0

Week 2 PAB= 0+100-30= 70

For week 3, use forecast as demand time fence is not applicable

Week 3 PAB= 70+0-50= 20

Week 4 PAB = 20+100-50= 70

Step-by-step explanation

PAB (Projected Available Balance) refers to the running total of readily available inventory minus requirements plus scheduled receipts and planned orders. In this case, since the period is before or after demand time fence, and the lot size is 100, the demand time fence falls under 2 weeks. This time fence is based on customer order and not forecast.

It is important to schedule MPS of 100 units as the available 25 units is not enough to meet the customer order.