1. Ch. 6 Master Production Scheduling
SCM 461
Dr. Ron Tibben-Lembke
Pages: ,

2. Master Production Schedule
Provides basis for:
Making good use of manufacturing resources
Making customer delivery promises
Resolving tradeoffs between sales and manufacturing
Attaining strategic objectives in the sales and operations plan

3. What is “Master Production Scheduling?”
Start with Aggregate plan
(Aggregate Sales & Ops Plan)
Output level designed to meet targets
Disaggregates
Converts into specific schedule for each item

4. S&OP vs MPS
“The role of the sales and operations plan is to balance supply and demand volume, while the MPS specifies the mix and volume of the output”
MPS shows when products will be available in future
Planned production, not forecast

5. Master Production Scheduling Techniques
Available = inventory position at end of week
= starting inventory + MPS – forecast
Plan to have positive inventory level
Buffer in case production below plan
Or demand higher than anticipated
MPS row is amount to make, MRP system has to figure out how to make it

6. Figure 6.2 Level demand, level production plan 1 2 3 4 5 6 7 8 9 10 1112
Forecast
Available (End) 20
MPS
On hand (start)

7. Figure 6.3 Different sales forecast
Same total: 120 units, starts lower, goes higher
Level production plan

8. Figure 6.4 Same demand as 6.3 Production adjusts to meet demand
“Chase” production strategy

9. Figure 6.5 Lot size of 30 units
Produce if projected balance falls below 5 units
Extra on-hand inventory is “cycle stock”
5 unit “trigger” is safety stock

10. Figure 6.5a – next week Demand in week 1 was 10
Marketing decides forecast was incorrect
Raise forecasts to 10 for weeks 2-6
Ending Available for wk 2 projected to be 0
Need to produce in week 2.

11. Figure 6.6 Roll forward one week Higher demand over weeks 1-12
Total was 120, now is 155
Need to revise MPS

12. Figure 6.7 Production planned for week 4 moved to 2 – can we do it?
Planned to do 4 batches in 12 weeks, now need 5 – feasible?
Changing schedule is expensive, maybe very expensive

13. Order Promising 6.8 Track # units ordered for each period
More orders expected for periods 2,3
From on-hand, how many units not yet spoken for?
ATP = 20 – (5+3+2) = 10

14. Available to Promise ATP
Backlog of 10 orders over first 3 weeks: 5,3,2
Actual firm customer orders, not forecasts.
Total shipments expected to be 5 in early weeks
20 units on hand.
10 units are available to promise
20 units on hand have to cover all demands until next production

15. Week 1 Demand is 10 Suppose demand is 10 in week 1.
Orders for 5 week 1 units were received in week 1.
Already had firm orders for 5 for wk 1.
Increase forecasts of future week shipments.
Started period 1 with 20, demand was 10, ended with 10.

16. Order Promising – Fig. 6.9 Received more orders for periods 2-4
Period 2 ending inventory would be 0, so have to produce in week 2.
(10+30) – (5+5+2)=28
Order backlog went from 10 to 12- factor in revising forecasts?

17. Starting inventory plus production is 10+30 = 40.
We have orders for 5 in period 2
It looks like we could accept orders for up to 35 more units in week 2.
But we can’t. We’ve promised 7 of those units to weeks 3&4.
Selling more would mean we have to expedite another shipment, like we just did, but which we really, really don’t want to have to do.
So, not safe to assume we can easily expedite in short term

18. Calculating “Available”
Current batch plus on hand
Minus the greater of Forecast and confirmed orders
Previous available + MPS – (greater of forecast or orders)

19. Calculating ATP Calculated in current week and any week with MPS>0
Current period: on-hand plus any current period MPS, minus all orders in that and subsequent periods until next MPS
Later periods: MPS – all orders until next MPS
ATP = MPS in weeks 5, 8, 10, 12

20. ATP: Future Deficiencies
Order for 35 in week 10.
Wk 10 ATP goes to 0, 5 additional units need to come from ATP for previous MPS
Week 8 MPS goes to 25
Set MPS for 11? We need to do something.

21. Consuming the Forecast Fig. 6.10
Go back to Fig. 6.9
Can we accept following orders?
5 units week 2
15 units week 3
35 units week 6
10 units week 5

22. 5 in week 2? 5 in week 2 – must come from ATP in week 2.
ATP in 2 is 28, so it works.
Reduce ATP to 23, add order

23. 5 in week 2? OK
Reduced ATP to 23, add 5 to Orders

24. 15 in week 3? 15 in week 3 – needs to come from ATP in week 2.
ATP in 2 is 23, so it works

25. 15 in week 3? OK Reduced ATP to 8, added 15 to “Orders”
Notice all future ending levels went down by 10
Consider moving MPS from 5 to 4.
Depends on marketing’s beliefs about 4.
If no more than 10 will come, we might be OK.

26. 35 in week 6?
ATP in week 5 is only 30.
How could this work?

27. 35 in week 6? OK 30 from ATP in week 5, which goes to 0.
Need 5 more ATP from week 2, ATP in 2 goes down to 3.
But it would only be prudent to approve it if:
You think this 35 represents all the demand you’ll see
(Those forecasted other orders are not coming), OR
You can adjust the MPS to meet forecasted demand
No room to accommodate 10 in w 5, could do in week 8

28. Fig. 6.10 Roll one week forward in time
What to do about Available < 0?
Maybe nothing. forecasted sales may not appear
If they do, we’re in trouble – produce more, or earlier, depends on other products’ needs

29. Bill of Materials
Bill of Materials – Parent-child diagram that shows what goes into what.
Used to make sure enough parts for production plan
Each part has LT, ordering policy
One BOM for every end product
Bike
Frame
Assy
Wheel Assy
Wheel
Tires
Components
Frame
Hubs & Rims
Spokes

30. BOM formats Single-level BOM only shows one layer down. Indented BOM
Bike
Frame Assembly
Components
Frame
Wheel Assembly
Wheel
Hubs & Rims
Spokes
Tires
Spokes
Wheel
Tires

31. Low-Level Code Numbers
LLC 1 2 3 4
Lowest level in structure item occurs
Top level is 0; next level is 1 etc.
Process 0s first, then 1s
Know all demand for an item
Where should blue be?

32. LLC Drawing Item only appears in one level of LLC drawing1 2 3 4
Item only appears in one level of LLC drawing
Easier to understand
Simplifies calculations

33. Final Assembly Schedule
Master Production schedule is anticipated build schedule
FAS is actual build schedule
Exact end-item configurations

34. Schedule Stability
Stable schedule means stable component schedules, more efficient
No changes means lost sales
Frozen zone- no changes at all
Time fences
>24 wks, all changes allowed (water)
16-23 wks substitutions, if parts there (slush)
8-16 minor changes only (slush)
< 8 no changes (ice)

35. HW
Pages ,
DQ: 1,3,5
Problems: 1,4,6,8