Level output rate
Level rate per period = total demand over the horizon / number of periods
Level rate per day = total demand / total production days
Sizing a level plan. Check it against total demand before costing anything, or the plan may be infeasible.
- total demand
- Sum of the period forecasts across the whole horizon
- production days
- Working days in each period; they usually differ
Inventory and backlog balance
Output - forecast, cumulated = ending inventory
If the cumulative balance is negative, it is a BACKLOG, not negative inventory
Building the inventory rows of an aggregate plan. Cumulate; never recompute each period from scratch.
- ending inventory
- Stock at the end of the period, never below zero
- backlog
- Unmet demand carried into the next period, charged per unit per period