Case Study : Acme Water Pumps

April 23, 2020 at 4:29 pm | By : Muhammad Syarif Catatanku, Kuliah S2 No comments

The Acme Water Pump company has a problem. The pumps are fairly expensive to make and store, so the company tends to keep the inventory low. At the same time, it is important to respond to demands quickly, since a customer who wants a water pump is very likely to get one from a competitor if Acme doesn’t have one available immediately. A cm e’s current policy to produce pumps is to produce 100 per week, which is the average demand. Even this is a problem, as the production manager has pointed out, since the equipment is also used for other products and the lot size of 300 would be much more efficient. He said he is currently set up for water pump production for the next week and states that he has capacity available to produce 300 at a time next week.

The following lists the forecasts and actual customer orders for the next 12 weeks

The president of Acme has said that he wants to consider using a formal MPS with ATP logic to try to meet demand more effectively without a large impact on inventory. Acme has decided to use a demand time fence at the end of week 3 and has also found out that its current inventory is 25 units. Assume Acme will use the MPS lot size of 300 and that it will produce the first of those lots in week 1.

Assignment

1. Develop a master schedule using the information above.
2. A customer has just requested a major order of 45 pumps for delivery in week 5. What would you tell the customer about having such an order? Why? What, if any thing, would such an order do to the operation?

Answer

- Keep inventory low

- Respond demand quickly

- currently produce 100 pumps a week.

- Setting up 300 pumps a week

- Current inventory is 25 units.
- Use MPS lot size of 300 (first week)

1. Master schedule

Current inventory is 25 units.

No	Period	A	B	C	D	E	F	G	H	I	J	K	L
1	Period	1	2	3	4	5	6	7	8	9	10	11	12
2	Forecast	90	120	110	80	85	95	100	110	90	90	100	110
3	Cust. orders	105	97	93	72	98	72	53	21	17	6	2	5
4	Projected Available Balance	220	123	30	250	152	57	257	147	57	267	167	57
5	MPS	300			300			300			300
6	ATP	30			58			209			287

Link excel :

https://docs.google.com/spreadsheets/d/1m0ktebzDEZQYW-7Nhn-eBD0oF7fnwUZoC4A38jNx16w/edit#gid=0

Formula Projected Available Balance :

A4 = A5+25-A3 = 300 + 25 – 105 = 220

B4 = A4-B3 = 220 – 97 = 123

C4 = B4-C3 = 123 – 93= 30

D4 = D5+C4-MAX(D23) = 300 + 30 – MAX(80:73) = 250

E4 = D4-MAX(E2:E3) = 250 – MAX(85:98) = 152

F4 = E4-MAX(F2:F3) = 152 – MAX(95:72) = 57

G4 = G5+F4-MAX(G2:G3) = 300 + 57 – MAX(100:53) = 257

H4 = G4-MAX(H2:H3) = 257 – MAX(110:21) = 147

I4 = H4-MAX(I2:I3) = 147 – MAX(90:17) = 57

J4 = J5+I4-MAX(J2:J3) = 300 + 57 – MAX(90:6) = 267

K4 = J5-MAX(K2:K3) = 267 – MAX(100:2) = 167

L4 = K4-MAX(L2:L3) = 167 – MAX(110:5) = 57

Formula ATP:

A6 =A5+25-SUM(A3:C3) = 300 + 25 – SUM(A3:C3) = 30

D6 = D5-SUM(D3:F3) = 300 – SUM(D3:F3) = 58

G6 = G6-SUM(G3:I3) = 300 – SUM(G3:I3) = 209

J6 = J6-SUM(J3:L3) = 300 – SUM(J3:L3) = 287

2. Request of 45 pumps

Cust. orders week 5 = 98 + 45 = 143

Period	0	1	2	3	4	5	6	7	8	9	10	11	12
Forecast		90	120	110	80	85	95	100	110	90	90	100	110
Cust. orders		105	97	93	72	143	72	53	21	17	6	2	5
PAB	25	220	123	30	250	107	12	212	102	12	222	122	12
ATP		30	0	0	13	0	0	209	0	0	287	0	0
MPS		300	0	0	300	0	0	300	0	0	300	0	0

Link excel : https://docs.google.com/spreadsheets/d/1m0ktebzDEZQYW-7Nhn-eBD0oF7fnwUZoC4A38jNx16w/edit#gid=1987357231

Berdasarkan penghitungan di atas, tambahan permintaan 45 pump pada minggu ke 5 tidak berdampak pada kekurangan persediaan pada minggu-minggu berikutnya. Sehingga, tidak perlu adanya penggunaan produk yang dialokasikan dari ATP pada minggu sebelumnya. Permintaan tersebut dapat diterima tanpa perlu ada penambahan proses operasi pada produksi.

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