Worldwide Can Openers Inc. Makes A Family Of Two-Hand Operat

Worldwide Can Openers Inc Makes A Family Of Two Hand Operated Can

Worldwide Can Openers Inc makes a family of two hand-operated can openers. The production plan is based on months. There are 4 weeks in this month. Opening inventory is 2000 dozen, and it is planned to increase that to 4000 dozen by the end of the month. The MPS is made using weekly periods. The forecast and projected available balance for the two models follow. The lot size for both models is 1000 dozen. Calculate the production plan (list quarterly production), create an MPS (list when scheduled receipts will exist and in which periods), and determine the projected available balance in Period 3.

Paper For Above instruction

The planning of production for Worldwide Can Openers Inc involves a nuanced understanding of Master Production Schedule (MPS) principles, inventory management, and demand forecasting. Based on the provided data, the goal is to develop a weekly and quarterly production plan, identify scheduled receipts, and forecast inventory levels, specifically focusing on the projected available balance in Period 3.

Understanding the Context and Data Provided

The company produces two models of hand-operated can openers, with a lot size of 1000 dozen units for each model. The forecast demand and projected available balance for these models are essential for planning production schedules. The opening inventory is 2000 dozen, with a goal of increasing to 4000 dozen by month-end. The planning is based on weekly periods within a monthly framework, typically translating into four weekly periods per month.

The first step is to interpret the forecast data (though not explicitly detailed here), and if it included demand per week, then it could be used to determine the production schedule needed to meet demands while maintaining sufficient inventory levels. The planned increase in inventory suggests that the production schedule must account for both anticipated demand and the target inventory.

Developing the Weekly Production Schedule

Given the lot size constraint (1000 dozen), the production schedule must be in multiples of this lot size. For example, if the demand in a week is less than 1000 dozen, production would need to be scheduled accordingly to meet demand or to build up inventory.

The opening inventory is 2000 dozen, which provides a buffer for initial periods. To reach an end-of-month inventory of 4000 dozen, the company will need to plan increments in production, aligning with projected demand and inventory targets.

Assuming the forecast demand per week is known, the company would produce in batches of 1000 dozen, scheduling these batches to meet demand and inventory goals. The scheduled receipts would occur when production batches are completed. These scheduled receipts appear in the weeks following production, depending on lead time—assumed here to be immediate or minimal for simplicity.

Creating the Master Production Schedule (MPS)

The MPS would specify the weeks when production occurs, including scheduled receipts, which are deliveries from completed production runs. For example, if a batch is produced in Week 1, the scheduled receipt exists in Week 1 if instantaneous, or in the subsequent week if there is a lead time.

Based on the demand forecast, the production in each week should be balanced to avoid excess inventory or stockouts. The MPS would list the quantities scheduled for production each week and when the receipts are expected.

Calculating Projected Available Balance in Period 3

To determine the inventory in Period 3, the initial inventory plus scheduled receipts and production must be adjusted for demand in the period. The typical calculation involves:

- Starting with the beginning inventory,

- Adding scheduled receipts (production completed),

- Adding any beginning inventory or previous period inventory,

- Subtracting demand for the period,

- Leading to the projected ending inventory for that period.

Assuming demand is uniform and known, the calculations follow straightforward inventory management formulas.

Conclusion and Recommendations

A detailed production plan should align weekly production quantities with forecasted demand, scheduled receipts, and inventory targets. The plan should specify production batches of 1000 dozen, with scheduled receipts following each batch. The projected available balance in Period 3 should reflect the cumulative effect of production and demand, ensuring that the inventory remains within the company's desired levels.

Implications for Operational Efficiency

Effective use of the MPS allows Worldwide Can Openers Inc to optimize production, reduce excess inventory, and meet customer demand reliably. Consistent review and adjustment of the schedule ensure responsiveness to demand fluctuations, maintaining a balance between supply and inventory.

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References

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