Available-to-Promise (ATP) Sales employees in your company...

Available-to-Promise (ATP) Sales employees in your company would like to know whether their customers' orders for can openers can be fulfilled. In long-term planning for the next half-year, you have put up the master production schedule provided below. Furthermore, your sales department has given you a list of customers' orders that have already been promised. At the beginning of the year, you have 800 can openers in stock. Master Production Schedule: $$ \begin{array}{|l|l|l|l|l|l|} \hline \text { January } & \text { February } & \text { March } & \text { April } & \text { May } & \text { June } \\ \hline 600 & 600 & 600 & 600 & 450 & 450 \\ \hline \end{array} $$ Promised orders: 1200 pieces on February 14, 1400 pieces on April 5, 450 pieces on June 10. a. How many can openers can your sales employees promise to customers in the next six months? (Assume that the amount planned to be produced in the master production schedule is available at the beginning of each month.) b. Is the master production schedule feasible? c. On January 7, a customer asks for 600 can openers to be delivered instantly. How do you react?

Available-to-Promise (ATP)

Sales employees in your company would like to know whether their customers' orders for can openers can be fulfilled. In long-term planning for the next half-year, you have put up the master production schedule provided below. Furthermore, your sales department has given you a list of customers' orders that have already been promised. At the beginning of the year, you have 800 can openers in stock.

Master Production Schedule:
$$
\begin{array}{|l|l|l|l|l|l|}
\hline \text { January } & \text { February } & \text { March } & \text { April } & \text { May } & \text { June } \\
\hline 600 & 600 & 600 & 600 & 450 & 450 \\
\hline
\end{array}
$$

Promised orders: 1200 pieces on February 14, 1400 pieces on April 5, 450 pieces on June 10.
a. How many can openers can your sales employees promise to customers in the next six months? (Assume that the amount planned to be produced in the master production schedule is available at the beginning of each month.)
b. Is the master production schedule feasible?
c. On January 7, a customer asks for 600 can openers to be delivered instantly. How do you react?

Key Concepts

Real-Time Order Fulfillment

Real-time order fulfillment focuses on the process of managing and responding to new, immediate customer orders. It requires balancing existing production commitments with the urgent demands of new orders, often necessitating adjustments in allocation, priority rules, or expedited production to meet customer expectations.

Available-to-Promise (ATP)

ATP is a critical concept in supply chain management, reflecting the portion of planned inventory and production that is not yet allocated to existing customer orders. It enables sales teams to determine whether new or additional orders can be met without jeopardizing current commitments.

Master Production Schedule (MPS)

The MPS is a detailed plan that specifies the quantities of products planned for production in each time period. It serves as the blueprint for production activities, guiding inventory levels and ensuring that production aligns with demand over planned periods.

Inventory Management

Inventory management involves tracking and controlling the stocks of raw materials and finished products. This includes beginning inventories, production outputs, and allocations to fulfill customer orders, ensuring that supply matches demand while minimizing holding costs.

Feasibility Analysis

Feasibility analysis in production planning evaluates whether a proposed production schedule can meet all current and committed orders. This assessment takes into account production capacities, inventory levels, and timing of customer requirements to detect potential shortages or overproduction.

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