Bus 307 operations management & quantitative techniques
This schedule will be based on the amount of ingredients and raw materials needed for production. Inventory items such as flour, butter or margarine, sugar, yeast and salt are included. After these materials are purchased and brought to the factory, a schedule of production can be created based on the estimated demand.
If, for example, 500 units per day are to be sold over the course of a week from Monday through Sunday this will result in 3500 unit production requirements (500 times 7 days). If one hour is required to manufacture each unit, this would mean that three thousand hours of work must be scheduled during that same week. If all the orders were fulfilled and there are still excess units (i.e. between 200 to 400 depending on total order), then this would be what is left in the ending stock. The available-to-promise number would refer to the maximum amount of product that could potentially be made within a given time frame according to current stock levels—with any additional orders requiring more resources being put into place first before they can become available again in future weeks/months.