Final answer:
The question involves using discrete available-to-promise logic and the Master Production Schedule to manage inventory in operations management. It involves calculating initial ATP and adjusting it based on new orders and scheduled receipts in each MPS period.
Step-by-step explanation:
The question you've asked pertains to a concept in operations management known as discrete available-to-promise (ATP). This is part of inventory management and supply chain planning. To prepare the Master Production Schedule (MPS), we would first calculate the initial ATP by subtracting the backlog orders from the on-hand inventory. As orders are received, ATP is adjusted by subtracting these new orders from the initial ATP value. Then, with each new MPS period, the ATP is recalculated by adding the quantity scheduled to arrive that period (the MPS quantity) to the ATP from the previous period and then subtracting any customer orders for that period.
To elaborate the process with an example: if we start with an on-hand inventory of 100 units and a backlog of 20, our initial ATP would be 80 units. If we have scheduled receipts of 50 units in week one and 30 units in week two, with customer orders of 40 units in week one and 50 units in week two, our ATP for week one would be 90 units (80 initial ATP + 50 scheduled - 40 orders) and for week two, it would be 70 units (90 ATP week one - 50 orders + 30 scheduled).