Assumptions

Example 1

1.   The tentative master schedule is calculated as the incremental order quantity required to meet demand and target inventory; in this case, 400 units:

2.   The current schedule is calculated as the balance due on current orders.  The tentative and current schedules are compared as follows:

If, however, an additional 200 units are received before the tentative and current schedules are compared, the following results:

Although neither demand, target inventory, nor schedule production has changed, the comparison results in a suggested increase of 200 units.  If the suggested action is implemented, the resulting inventory will be 200 units greater than the target inventory.

Example 2

1.   The tentative master schedule is calculated as the incremental quantity required to meet demand and target inventory, plus receipts against orders due in the period:

2.   The current schedule is calculated as the expected yield on all orders scheduled for the period, including units already received:

The result is the same regardless of the activity that occurs between the generation and the implementation of the tentative schedule.

**Projected Inventory

Note in Example 2 that the portion of the tentative schedule that has been received has been taken into account in calculating the projected inventory.  This portion is listed as the Supply Activity quantity on the Tentative Schedule Generation Report; similarly, the Demand Activity, or that portion of demand which has been shipped to a customer or issued to a manufacturing order, is listed on the report.  Thus, the projected inventory calculation is as follows:

which, for the above example, is as follows: