Question 1

Read the case study and answer the questions follows.

Benzie Products Company produces several lines of products, but one (they call it product X) uses unique parts to produce it and demand is very seasonal. There are some possible variations in the design, so the company tends to use available-to-promise (ATP) logic to master schedule the product. Since the components to produce it are quite expensive, the company tries very hard to minimize any inventory of the product or its components during the seasons with very low sales. There are currently 27 product X left in inventory. Safety stock is zero (0).

Product X is just now entering the low season, and the following chart represents the forecast data and actual customer orders for the next ten weeks.

Week	1	2	3	4	5	6	7	8	9	10
Forecast	25	20	16	16	15	15	13	11	10	9
Customers orders	27	21	16	13	11	9	7	4	3	2
MPS		50			50			50

1. Complete the master schedule for Product X, including the projected available inventory. (20 Marks)

2. Suppose that a customer for Product X wants additional units for their orders scheduled for week 4. What would you tell them? Specifically, if you cannot promise them the additional units for week 4, what is the best that you can do given the information you have. Assume that adequate capacity exists in all the production equipment. (30 Marks)

3. It is clear that the company has set the safety stock (planning for extra material just in case something goes wrong) level for components at zero in order to minimize their inventory during the slow season. Discuss this policy, pointing out the pros and cons of such a policy. (20 Marks)

4. Develop what you might suggest as a policy for safety stock given the information available in the case. (30 Marks)