You have a MTS product that has sales of about 1000 units per month. You manufacture this product in 500 unit batches (so, roughly, a 500 unit batch every other week). There is no significant seasonality and the current standard deviation is 30 units per month.

Customer orders: The average order size is 15 units; the largest, single order within any month is usually no more than 30. Orders are received daily and more or less evenly distributed throughout the month. Orders are normally shipped within 24 hours of receipt (consistent with operating in a MTS environment).

As of the start of business this morning (a Monday), you have 330 units in inventory, and the next batch of 500 units is due in next Monday. You operate on a five-day-per-week (M-F) schedule.

A single order for 150 units has just been received, with no special shipping instructions or ship dates (implying that normal order turn-around time is expected?). Would you want your order entry system to let this order into your system for fulfillment just like any other order? Yes or no and briefly explain your reasoning. What other actions should you then take?

Answer rating: 100% (QA)

Monthly demand 1000 units Working days 20 days IeMF or 22 days Average demand per da... View the full answer