# Assignment 11.1..docx

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Uploaded by Tom Driessens 3350 at 2020-05-22
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Hope this helps!

+5
245
5
how did you come up with the regular demand for 5a.? :)
You just use the maximum regular capacity you can to cover the forecast, without exceeding them as you can’t keep anything in inventory here
thanks!! :)
Why is this not 10 when Ending Inventory= Beginning Inventory + (Output - Forecast) so 0 + 10 should be then equal to 10 right ?
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You have to consider backlogs here, as those are units you reserve from the next month to compensate for lack of production in the current month, so you "use" them in the current month (then you have them as produced in this month), but have to account for the loss of produced units in the next month (as you took the units "in advance").
Thank you!
How did you came up with the regular demand? Isn't it 130 for each period (1040/8)?
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Thx a lot!
No prob :)
how do you choose which months to subcontract?
You have to think about the relationship between Forecasts and Capacity. the relation here is Forecasts + Ending Inventory = Regular + Beginning Inventory + Subcontract. Months 1, 3 & 6 forecasts are covered completely by the Regular output, then we get the difference as ending inventory.
In months 2 & 4, Regular + Beginning Inventory are enough to cover Forecasts Then, in months 5 & 7, Regular + Beginning Inventory are not enough to cover forecasts, so you need to cover the difference by subcontracting the remaining amount.
Isn't it equal to (5) ? We start with 5 of inventory+130 for the production - 140 for the amount used to satisfy the demand in the current period?
No, it is 0 and it cannot be (5) as you can't have negative inventory values, that would not make sense. Your computation is right, but you forgot to add the backlog of 5 engines in it (to the produced side), which then gives you an ending inventory equal to 130 (regular) + 5 (inventory) + 5 (backlog) - 140 = 0. Hope this makes it clearer.