1. Disaggregation
Working with aggregate units facilitates intermediate planning.
But to put this plan into action we should translate it,
decompose it, disaggregate it and state it in terms of actual units
of products and for a shorter period
Aggregate planning was for 12 or more months.
Now we should break it down into shorter periods, say 2-3 months.
Disaggregation:
Breaking down the aggregate plan into specific products - from aggregate product to real specific products - based on the specific products, then calculating detail of manpower,
material and inventory requirements.

2. Disaggregation

3. Master Schedule The result of disaggregation is a master schedule.
The Master Schedule shows quantity and timing of specific products.
It usually covers 6 to 12 weeks.
After preparing a tentative Master Schedule, a planner can do Rough-cut Capacity Planning.
Rough-cut capacity planning is to check the feasibility of the Master Schedule with respect to available manpower and machinery capacities, storage spaces, and vendor capabilities.
It is just a rough check to ensure that the master schedule is achievable.
The master schedule then is used as the basis for short term planning.

4. Master Schedule
Aggregate plan: 12 months.
Master schedule: 12 weeks.
Master schedule is updated every 2 weeks.
Therefore, it is on a rolling basis, always we have a disaggregated plan for the next 12 weeks.

5. Master Production Schedule (MPS)
Master schedule states quantity and delivery time of specific products.
It says we need 75 push lawnmowers in January. But it does not say how we get it - from production, or from inventory.
Master Production Schedule (MPS) is developed
based on Master Schedule.
MPS: Quantity and timing of planned production.
MPS determines the
Promised Inventory, and the
Production Requirements available to promise inventory for each period.

6. Master Scheduling Process
Inputs
Outputs
Beginning inventory
Projected inventory
Master production schedule
Uncommitted inventory
(Available to Promise)
Master
scheduling
Forecast
Customer orders
The key idea is: we have a forecast, but it turns into and actual order when we receive a customer order.
MPS starts with a preliminary calculation of projected inventory.
This reveals when we need production to get additional inventory.

7. Example; Projected on-hand Inventory
Beginning Inventory
Forecast is larger than Customer orders in week 3
Customer orders are larger than forecast in week 1
Forecast is larger than Customer orders in week 2

8. Master Production Scheduling Process
Negative projected on-hand inventory is the signal for production.
Suppose the economic production lot size for this product is 70 units.
Whenever production is called, 70 units are produced.
The negative projected inventory of -29 in period 3 calls for production, 70 units are produced, the projected inventory becomes 41.
The same calculation continues across the whole planning horizon.

9. Example; Projected on-hand Inventory

10. Example; Projected on-hand Inventory

11. Available To Promise (ATP)
Now we can determine available to promise at each period.
We use a look ahead procedure.
Sum booked customer orders week by week up to (not including) the next week of production. This is booked orders.
The remaining inventory is ATP.
ATP is only calculated for the first week and for weeks in which there is a MPS quantity. (In this example: weeks 1, 3, 5, 7, 8)

12. Available To Promise (ATP); First week
Available to promise in week 1 = Inventory in week 0 + Production in week 1 - Customer Orders at week 1 - Customer Orders at week 2
ATP(1) = I(0)+ P(1) - CO(1) - CO(2)
ATP(1) = = 11
This is an uncommitted inventory.
It can be assigned to week 1, week 2, or both.

13. Available To Promise (ATP); Other weeks
For other weeks, beginning inventory is removed from the formula:
ATP(3) = P(3)-CO(3)-CO(4)
ATP(3)= = 56
For weeks 7 and 8, no CO, therefore ATP = MPS

14. Updating ATP
As additional orders are booked, they would be entered into the schedule.
ATP would be updated to reflect new booked orders.
Marketing can use updated ATP amounts to provide realistic delivery dates to customers

15. Updating MPS Frozen Firm Full Open 1 2 3 4 5 6 7 8 9 10 11 12
Changing to a master production schedule can be disruptive.
Particularly changes in the immediate periods of the schedule
Aggregate Plan is developed for say 1 year
Master Production Schedule is developed for a period of say 12 weeks.
MPS is updated say every 2 weeks, it is on a rolling basis.
Frozen Firm Full Open

16. Assignment Problem 1. Book Page 627.
Forecast of demand for the next four months is 70 units per month
Committed customer orders for the next four months are 80, 50, 30, and 10, respectively. Order size is 100 units. Beginning inventory is 0.
Prepare MPS
Prepare ATP

17. Solution to Problem 1

18. Solution to Problem 1

19. Solution to Problem 1

20. Solution to Problem 1