Page 2 Learning Objectives Explain the role & objectives of a master production schedule Explain the organizational links to master production scheduling Develop a master production schedule Explain rough-cut capacity planning Calculate available-to-promise quantities Describe time fence policies
Page 3 Role of the MPS Aggregate plan: –Specifies the resources available (e.g.: regular workforce, overtime, subcontracting, allowable inventory levels & shortages) Master production schedule: –Specifies the number & when to produce each end item (the anticipated build schedule) –Disaggregates the aggregate plan
Page 4 Business Planning Hierarchy
Page 5 Planning Links to MPS
Page 6 Objectives of MPS Maintain the desired customer service level Utilize resources efficiently Maintain desired inventory levels
Page 7 Developing an MPS: Assume: –Make-to-stock environment –Production is in fixed quantities of 125 (MPS) –110 units in beginning inventory (BI)
Page 8 Sample Problem We start with 110 units in Beginning Inventory Projected Available: How many units are available at the end of each time period? MPS: Replenishment Shipments that need to arrive at the beginning of the time period Projected Available =BI + MPS - Forecast Period Forecast Projected Available 110 MPS
Page 9 Step 1 Find first negative “projected available” We start with 110 units in Beginning Inventory Projected Available: How many units are available at the end of each time period? (safety stock criteria could be in place > 5) MPS: Replenishment Shipments that need to arrive at the beginning of the time period
Page 10 Schedule Production
Page 11 Repeat
Page 12 Continue, Until Complete
Page 13 Evaluating the MPS Customer service issues: –Does “available-to-promise” inventory satisfy customer orders? –What new orders can we take from customers and when?
Page 14 Available to Promise When a customer places an order, they do not expect immediate delivery (negotiable). The product will delivered by some later date. ATP = how many uncommitted units the company has available at a given time
Page 15 New Calculation for Projected Available Projected Available = BI + MPS – Max (Customer Orders ; Forecast) Period Forecast Customer Orders Projected Available 110 Available to Promise MPS
Page 16 Available-to-Promise “Action Bucket” “Action Bucket” = the current period Only calculate ATP during in Action Bucket and when MPS occurs ATP action bucket = BI +MPS-customer orders before next replenishment – (35+25) = 50 Period Forecast Customer Orders Projected Available Available to Promise50 MPS125
Page 17 Available-to-Promise “Replenishment periods” ATP for replenishment periods ATP = MPS - customer orders between current MPS and next scheduled replenishment ATP period 3 = 125 – ( )= 80 ATP period 5 = 125 – (0 + 15)= 110 Period Forecast Customer Orders Projected Available Available to Promise MPS125
Page 18 New Order Suppose we get an order for 200, can we accept this for delivery in period 5?
Page 19 Worksheet for New Order for 200 Fit in the order for 200 (can’t change MPS) Period Forecast Customer Orders Projected Available Available to Promise5080 MPS125
Page 20 New Order for 200 Negative number in Projected Available = might be a problem in the future Negative number in Available to Promise= always a problem Solution? Period Forecast Customer Orders Projected Available Available to Promise MPS125
Page 21 Split up New Order for 200 Check to see if this is OK Period Forecast Customer Orders Projected Available 110 Available to Promise MPS125
Page 22 Can you now take 2 more orders? Period Forecast Customer Orders Projected Available Available to Promise4000 MPS units to be delivered in Period 8 30 units to be delivered in Period 12
Page 23 Time Fences
Page 24 Frozen: no changes are possible with a certain period of time (i.e. 8 weeks) Time Fence (length of period schedule is frozen, liquid, etc.) Demand Fence: MPS numbers do not change and focus is on orders not forecast Planning Fence: Master Production Scheduler is planning more MPS.
Page 25 Rough-cut capacity planning An estimate of the plans’ feasibility Given the demonstrated capacity of critical resources (e.g.: direct labor & machine time), have we overloaded the system?