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Purchasing Assignment
Ajman University of Science & Technology

College of Business Administration
Purchasing & Materials Management

Individual Assignment

10 marks

Q1. A company wants to develop a level production plan for a family of products. The opening inventory is 500 units, and a decrease to 200 units is expected by the end of the plan. The demand for each of the periods is given in what follows. All periods have the same number of working days. How much should the company each period? What will be the ending inventories in each period? Do you see any problems with the plan?

Total production = 5600 + 200 – 500 = 5300
Planned production each period = 5300/6 = 884

|Period |1 |2 |3 |4 |5 |6 |Total |
|Forecast Demand |1300 |1200 |800 |600 |800 |900 |5600 |
|Planned Production |884 |884 |884 |884 |884 |884 |5304 |
|Planned Inventory |500 |84 |-232 |-148 |136 |220 |204 |
|Forecast Demand |750 |700 |550 |700 |600 |500 |3800 |
|Planned Production |750 |750 |750 |750 |750 |750 |4500 |
|Projected Backlog |
|Quarter |1 |2 |3 |4 |Total |
|Forecast Sales |220 |300
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