Slides 5 2 calculate a production plan with the inventory c

Calculate a Production Plan with the Inventory Chain Template Intermediate Cost Analysis and Management... Terminal Learning Objectivehandouts, readings, and spreadsheet tools and aware

Calculate a Production Plan with the Inventory Chain

Template

Intermediate Cost Analysis

and Management

What is a Forecast?

Terminal Learning Objective

handouts, readings, and spreadsheet tools and awareness of Operational

Environment (OE)/Contemporary Operational Environment (COE) variables and actors

Production Needs, then Plan Direct Labor, Overhead and Forecast Material Purchases

Consider the Following Process Flow

outputs

table

Planning’s Key Difference:

Backward Chaining

backwards through the process

meat for ten burgers

need to specify output and inventory end states in order to plan properly

Input-Output Equation

Beginning + Input – Output = End

If you take more water out of the

bucket than you put in, what happens to the level

in the bucket?

Using the Equation

Full Tank + 10 gallons – Output = Full TankFull Tank + 10 gallons = Output + Full Tank

The Input-Output Equation

InventoryBeginning

Ending

Beginning + Input – Output = Ending

Material Requirements Planning

Inventory Beginning

Input Output Ending

Inventory Beginning

Input Output Ending

Inventory Beginning

Input Output Ending

Learning Check

Demonstration Problem

• Output goal is 10

• Planned ending grill inventory is 0

• Planned ending refrigerator inventory is 35

• Planned ending freezer inventory is 20

• Actual beginning grill inventory is 0

• Actual beginning refrigerator inventory is 10

• Actual beginning freezer inventory is 30

purchase and put into the freezer?

planned end states

starting points

planned action

Backward Chaining Demonstration

End 0

-Beg 0

Cook 10

End 0

- To grill

Backward Chaining Demonstration

End 0

-Beg 0

Cook 10

End 0

-10  To grill

Backward Chaining Demonstration

End 0

-Beg 0

Cook 10

End 0

-10  To grill

Bill of Materials

• Buns

• Cheese

• Pickles, onion, lettuce, and tomatoes

• Mustard, ketchup, mayo

planning?

Pantry  Assembly  Grill

and Grill is zero units

Marshmallows Graham crackers Chocolate squares

 To grill

Graham crackers Beg 6

-30  To grill

Graham crackers Beg 6

-30  To grill

Graham crackers Beg 6

1 p

er u nit

-30  To grill

Graham crackers Beg 6

-30  To grill

Graham crackers Beg 6

Real World Complexities

(MRP) systems in much more complex situations

especially when you consider the lead times of purchasing and assembly!

especially when you consider the lead times of purchasing and assembly!

But My Organization Doesn’t Have Inventory!

Learning Check

Planning’s Impact on Cost

volume

Flexible Forecast Example

Flexible Forecast Example

Flexible Forecast Example

Flexible Forecast Example

Flexible Forecast Example with Revenue

Flexible Forecast Example with Revenue

Learning Check

Practical Exercise

Planning/Flexible Forecasting Spreadsheet

Enter basic cost information and various production levels to calculate the flexible forecast

Enter basic cost information and various production levels to calculate the flexible forecast

Planning/Flexible Forecasting Spreadsheet

Enter Data in the Bill of Materials tab to calculate Production and Materials Purchase Plan

Enter Data in the Bill of Materials tab to calculate Production and Materials Purchase Plan

Practical Exercise