Acme Water Pump Case study

Acme Water Pump Case study. The Acme Water Pump company has a problem. The pumps are fairly expensive to
make and store, so the company tends to keep the inventory low. At the same time,
it is important to respond to demand quickly, since a customer who wants a water
pump is very likely to get one from a competitor if Acme doesn’t have one available
immediately. Acme’s current policy to produce pumps is to produce 100 per week,
which is the average demand. Even this is a problem, as the production manager has
pointed out, since the equipment is also used for other products and the lot size of
300 would be much more efficient. He said he is currently set up for water pump
production for the next week and states he has capacity available to produce 300 at a
time next week.
The following lists the forecasts and actual customer orders for the next 12 weeks:
76 Chapter 3
Week 1
90
105
2
120
97
3
110
93
4
80
72
5
85
98
6
95
72
7
100
53
110
21
8
90
17
9
90
6
10
100
2
11 12
110
5
Forecast
Customer Orders

Acme Water Pump Case study

The president of Acme has said that he wants to consider using a formal MPS with
ATP logic to try to meet demand more effectively without a large impact on inven-tory. Acme has decided to use a demand time fence at the end of week 3 and has also
found out that its current inventory is 25 units. Assume Acme will use the MPS lot
size of 300 and that it will produce the first of those lots in week 1.
Discussion Questions
1. Develop a master schedule using the information above.
2. A customer has just requested a major order of 45 pumps for delivery in week 5. What
would you tell the customer about having such an order? Why? What, if anything, would
such an order do to the operation

Acme Water Pump Case study

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