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9609 · 9.3.5

Operations planning — practice questions

Practice and worked examples for 9609 Operations planning. Short previews only — attempt the full question in MarkScheme against the official scheme.

Worked example 1

Furniture maker forecasts 500 tables in March. MPS set accordingly. MRP orders 2,000 table legs (4 per table). Actual sales 350. Explain consequences and improvements.

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Over-forecast 30%: 150 excess tables if produced — inventory waste (9.3.4), cash tied up (5.1.2).

MRP consequence: 600 excess legs ordered if production started — supplier penalties or storage costs.

Fixes: Rolling 4-week MPS updated from actual orders not annual average; ERP for real-time sales feed (9.3.3).

Capacity: Before locking MPS, check labour hours vs 4.3.1 utilisation — don't plan beyond max capacity.

Worked example 2

A-Star Electronics forecasts demand for 120 units of its 'Galaxy Tablet' for Week 8. The company has 20 tablets in finished goods inventory and wants to maintain a safety stock of 10 units. The Bill of Materials (BOM) for one tablet requires 1 Screen Assembly (SA) and 2 Battery Packs (BP). Current component inventory is 30 Screen Assemblies and 50 Battery Packs. Lead times are 2 weeks for SA and 1 week for BP. Production of a batch of tablets takes 1 week. Calculate the required production run for the MPS and the net requirements and order timing for each component.

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This example demonstrates the full operations planning process from forecast to component ordering.

Step 1: Determine the Master Production Schedule (MPS) Quantity The MPS defines how many finished goods to produce. This is based on the forecast, existing stock, and safety stock targets.

  • Formula: MPS Quantity = (Forecast Demand + Safety Stock) - On-Hand Inventory
  • Calculation: (120 units + 10 units) - 20 units = 110 tablets
  • The MPS will schedule the production of 110 tablets, to be completed by Week 8.

Step 2: Calculate Gross Component Requirements This is the total number of components needed to produce the 110 tablets from the MPS.

  • Screen Assembly (SA): 110 tablets × 1 SA/tablet = 110 Screen Assemblies
  • Battery Pack (BP): 110 tablets × 2 BPs/tablet = 220 Battery Packs

Step 3: Calculate Net Component Requirements This is the quantity to order after using existing component stock.

  • Formula: Net Requirement = Gross Requirement - On-Hand Inventory
  • Screen Assembly (SA): 110 (Gross) - 30 (On-Hand) = 80 units
  • Battery Pack (BP): 220 (Gross) - 50 (On-Hand) = 170 units

Step 4: Plan Order Placement (Time-Phasing) Orders must be placed so components arrive before production begins. Since production takes 1 week and must finish by Week 8, it must start in Week 7. Therefore, components are needed by the start of Week 7.

  • Formula: Order Week = Required Week - Lead Time
  • Screen Assembly (SA): Required by Week 7. Lead Time is 2 weeks. Order must be placed in Week 5 (Week 7 - 2).
  • Battery Pack (BP): Required by Week 7. Lead Time is 1 week. Order must be placed in Week 6 (Week 7 - 1).

Conclusion: A-Star must order 80 Screen Assemblies in Week 5 and 170 Battery Packs in Week 6 to meet its production plan.

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