5. The XYZ Company’s finance manager is currently studying projected inventory investment for product 101 at the central (plant) warehouse.

Quantities of product 101 are shipped from the central warehouse to warehouses A and B, based on individual warehouse requirements. The product costs $100 per unit.

Using DRP parameters and inventory information for product 101 in Exhibit A, determine the planned order releases at the central warehouse.

Construct a graph indicating projected inventory investment at warehouse A for this product at the beginning and end of each week over the next six-week period. Assume this product’s demand is equally divided among the days of each week.

Transcribed Image Text:

Product 101 Warehouse A 1 Forecast requirements 20 In transit 15 Projected available balance 10 Planned shipments Q=40; LT 1; SS 0. Week 2 3 4 5 6 20 20 20 20 20 20 20 20 Week Product 101 Warehouse B 1 2 3 4 5 6 Forecast requirements 10 10 10 10 10 10 In transit Projected available balance 15 Planned shipments Q 20; LT 1; SS=0. Week Product 101 Central Warehouse 1 2 3 4 5 6 Gross requirements Scheduled receipts Projected available balance 60 Planned order release Q=lot-for-lot: LT = 1: SS = 0.