For each week with sales forecasts, Source Matrix Explosion (33.13.8) calculates global forecasts by totaling end-item forecasts from marketing sites.

The explosion uses the item’s average weeks-of-coverage factor (2.0) to calculate the global target inventory levels. Therefore, each week’s global target inventory equals the sum of the next two weeks of sales forecasts.

The explosion calculates global production due as (Sales Forecast + Target Inventory) – Previous Projected Quantity on Hand. For week 1, the previous projected QOH is 3,000, the ending inventory balance from the previous week.

The explosion initially calculates projected quantity on hand to equal the target inventory level. However, if you change production due, the system recalculates it as:

The explosion initially calculates projected weeks of coverage as the item’s average weeks-of-coverage factor. But the system recalculates it when you change production due.

For each week, the system subtracts the forecast for each upcoming week, until it encounters a week for which the on-hand quantity is insufficient to cover the forecast. It then divides the remaining inventory by the sales forecast for the week. Finally, it calculates weeks of coverage by totaling the number of complete weeks and the decimal for the partial week.

In Sales Forecasts and Projected Quantities on Hand, the projected weeks of coverage for week 1 is 2.3, because 3,000 is a sufficient quantity to cover the forecasts for the next 2.3 weeks.

For 10, projected weeks of coverage is only 1.0. The projected on-hand quantity is exactly enough to cover the sales forecast for 11, and there are no sales forecasts in the remaining weeks.

In this example, all production is distributed to one supply site with two production lines, 001 and 002. The site produces 75% of its requirement for the item on line 001 and the remaining 25% on line 002.

The formula for projected line production hours is Line Production Due Quantity ÷ Hourly Line Production Rate. For line 001, the production rate is 375 units per hour. For line 002, it is 125 units per hour.

The line utilization percentage is the line’s production load divided by its capacity. The weekly capacity is 15,000 cases for line 001 (375 * 40 hours) and 5,000 cases (125 * 40 hours) for line 002. In this example, both lines have a standard 40-hour weekly shift calendar, and there are no scheduled holiday, downtime, or overtime periods.