Ch.

6
Master Production
Scheduling
SCM 461
Dr. Ron Tibben-Lembke
Pages: 168-181, 183-188

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

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

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

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

Figure 6.2

Level demand, level production

plan

1
Forecast
10
Available (End) 20
MPS
10
On hand (start) 20

2
10
20
10

3
10
20
10

4
10
20
10

5
10
20
10

6
10
20
10

7
10
20
10

8
10
20
10

9
10
20
10

10
10
20
10

11
10
20
10

12
10
20
10

Figure 6.3

Different sales forecast

Same total: 120 units, starts lower,
goes higher
Level production plan

Figure 6.4

Same demand as 6.3

Production adjusts to meet
demand
Chase production strategy

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

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

Figure 6.6

Roll forward one week

Higher demand over weeks 1-12
Total was 120, now is 155

Need to revise MPS

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

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

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

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.

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?

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 cant. Weve 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 dont want to have
to do.
So, not safe to assume we can easily

Calculating Available

Current batch plus on hand

Minus the greater of Forecast and
confirmed orders
Previous available + MPS
(greater of forecast or orders)

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

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.

Consuming the
Forecast
Fig. 6.10

Go back to Fig. 6.9

Can we accept following orders?
1.
2.
3.
4.

5 units week 2
15 units week 3
35 units week 6
10 units week 5

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

5 in week 2? OK

Reduced ATP to 23, add 5 to

Orders

15 in week 3?

15 in week 3 needs to come

from ATP in week 2.
ATP in 2 is 23, so it works

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 marketings beliefs about 4.

35 in week 6?

ATP in week 5 is only 30.

How could this work?

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 youll 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

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, were in trouble produce more,

Bill of Materials
Bill of Materials Parent-child diagram
that shows what goes into what.

Bike
Frame
Assy
Component
s

Fram
e

Wheel
Assy
Wheel

Hubs
&
Rims

Spoke
s

Tires

Used to make sure

enough parts for
production plan
Each part has LT,
ordering policy
One BOM for every
end product

BOM formats

Single-level BOM
only shows one
layer down.

Indented BOM
Bike
Frame Assembly

Spoke
s
Wheel

Tires

Components
Frame

Wheel Assembly

Wheel
Hubs & Rims
Spokes

Tires

Low-Level Code
Numbers

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?

LLC
0
1
2
3
4

LLC Drawing

Item only appears

in one level of LLC
drawing
Easier to
understand
Simplifies
calculations

LLC
0
1
2
3
4

Final Assembly
Schedule

Master Production schedule is

anticipated build schedule
FAS is actual build schedule
Exact end-item configurations

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)

HW

Pages 168-181, 183-188

DQ: 1,3,5
Problems: 1,4,6,8