23/09/19

Master  Production  Scheduling

(MPS)
Dr. Niniet  Indah  Arvitrida

Department  of  Industrial  Engineering

Institut  Teknologi  Sepuluh  Nopember  (ITS)

Learning  objectives

Students  are  able  to

• Understand  master  production  scheduling  (MPS)  activities.
• Understand  and  use  the  MPS  techniques
• Understand  how  to  manage  the  MPS

MAIN  SOURCE:
Manufacturing  Planning  and  Control  Systems  for  Supply  Chain  Management (5th Edition,  2005),  by  Thomas  
Vollmann,  William  Berry,  Clay  Whybark,  and  Robert  Jacobs  

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Definition

The  MPS is  a  statement  of  what,  how  much,  and  when end  
items  are  planned  to  be  produced  over  planning  periods.  

It  is  a  disaggregation and  implementation of  the  production  

plan/aggregate planning/Sales and Operations Planning.

MPS follows the Aggregate Planning Strategy

(Chase, Level, Mixed)

SOP  /  AP  à balance  supply  and  demand  volume

MPS  à the  translation  of  SOP/AP  into  producible  products  

with  their  quantities and  timing determined.

At  the  operational  level

• The  MPS  is  developed  to  be  compatible  with  the  Materials  
Requirement  Planning  (MRP)  system  and  to  provide  the  information  
for  coordination  with  sales.  
• The  MPS  is  a  statement  of  planned  future  output.

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Functions  of  The  MPS

• It  schedules production  and  purchase  orders  for  MPS  

items
• It  is  a  principal  input to  MRP  system
• It  is    basic  for  determining resources  requirement
(material  and capacity)
• It  provides  the  basic  for  making  delivery  promises to  
customers

MPS  can  be  stated  as  

•End-­‐item  product  designations  

•Options  or  modules  from  which  a  variety  of  end  products  

could  be  assembled.  

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Inputs  for  MPS

1. Production  Plan
MPS  must  be  reconciled  with  Production  Plan
2. Demand  data
• Sales  forecast
• Customer  orders
• Safety  stocks
• Field  warehouse  requirements
3. Inventory  status
4. Ordering  policy

MPS  for  Different  Product  Positioning  Strategy

For  the  Make-­‐to-­‐Stock  firm,  the  items  are  produced  in  batches,  carrying  finished  goods  
inventories.  Normally  produced  from  a  large  number  of  raw  materials.  Thus,  MPS  is  
stated  in  terms  of  finished  products.

For  the  Make-­‐to-­‐Order  firm

• In  general,  it  carries  no  finished  goods  inventory  and  builds  each  customer  order  as  
needed,  and  delivery  due  date  is  a  negotiated  matter.  
• Production often  starts  before  a  complete  product  definition  or  BOM  has  
been determined.
• The  number  of  finished  products  could  be  much  larger  than  the  number  of  raw  
materials.

For  the  Assembly-­‐to-­‐order  firm

• The  MPS  unit  is  typified  by  an  almost  limitless  number  of  possible  end-­‐item  
configurations  all  made  from  combinations  of  basic  components  and  subassemblies.  
Probably  will  not  start  final  assembly  until  order  arrives.  

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MPS  for  Different  Product  Penetration  Point  

MPS  for  modules

FAS  for  end  items

End  items

MPS/FAS
Builds Finished MPS Builds
Items to Forecast Components &
Subassemblies

MTS MTO
ATO

Raw  Materials

Level  of  demand  

forecast
FAS  =  Final  Assembly  Schedule

Assemble  to  Order

FAS Configured
Final End Items
Lead-time
Assembly of
Exact Configuration for Delivery
OP T I ONS
MPS
Builds
Components
&
Subassemblies
Lead-time for
Manufacturing
Raw Materials/
Components

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Planning  Horizon

Terminologies:
• Planning  horizon  à the  length  of  future  periods  included  in  the  MPS  
(e.g.,  12  weeks)
• Planning  period  (or  time  bucket)  à the  time  unit of  one  period  (could  be  
week,  day,  etc.)
• Normally  the  planning  horizon  should  be  longer  than  the  lead  time  (from  
the  receipt  of  the  order  to  the  delivery  of  the  items)
Period 0 1 2 3 4 5 6 7 8 9 10 11 12

MPS

Planning  Horizon

Procurement Fabrication Assemble Packing Visibility

Cumulative  Lead  Time 1–3  months

Planning  Horizon

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Planning  period  or  Time  Bucket

• One-­‐month  bucket     à Long  lead  time

• One-­‐week  bucket à Medium  lead  time

• One-­‐day  bucket à Short  lead  time

Bill  of  Materials  Structuring  for  the  MPS

• It  is  an  engineering  document  that  specifies  the  ingredients  (or  subordinate  components)  required  
physically  to  make  each  part  number  or  assembly.  

Single-­‐level  BOM
• Comprises  only  those  subordinate  components  that  are  immediately  required  (not  the  
components  of  the  components).  

Indented  BOM
• Is  a  list  of  components,  from  the  end  item,  down  to  the  raw  materials  (it  does  show  components  
of  the  components).

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Bill-­‐of-­‐Material
Product  Structure  Tree

Bicycle(1)
P/N 1000

Handle Bars (1) Frame Assembly (1)

P/N 1001 P/N 1002

Wheels (2) Frame (1)

P/N 1003 P/N 1004

Time-­‐Phased  Product  Structure

Must have D and E completed

here so production can begin
Start production on B
of D
1 week D 2 weeks to
produce
B
2 weeks
E
A
2 weeks 1 week
E
2 weeks 1 week
G C
3 weeks
F
1 week
D

1 2 3 4 5 6 7 8

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A  Level Production  MPS  Approach  to  Seasonal  Sales

1 2 3 4 5 6 7 8 9
Forecast 5 5 5 5 5 5 15 15 15
Available 25 30 35 40 45 50 45 40 35
MPS 10 10 10 10 10 10 10 10 10
On-­hand 20

Available  (t)  =  Available  (t-­1)  +  MPS  (t)  – Forecast  (t)

MPS  is  set  constant  @  10  units  per  period

A  Chase Sales  MPS  Approach  to  Seasonal  Sales

1 2 3 4 5 6 7 8 9
Forecast 5 5 5 5 5 5 15 15 15
Available 20 20 20 20 20 20 20 20 20
MPS 5 5 5 5 5 5 15 15 15
On-­hand 20

Available  (t)  =  Available  (t-­1)  +  MPS  (t)  – Forecast  (t)

MPS  is  set  constant  @  forecast

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Different  strategy  on  MPS  results  in  different  inventory  level  

in  each  week.

Both  chase  and  level  strategies  maintain  a  constant  inventory  

level.

Lot  Sizing  in  the  MPS

1 2 3 4 5 6 7 8 9
Forecast 5 5 5 5 5 5 15 15 15
Available 15 10 5 30 25 20 5 20 5
MPS 30 30
On-­hand 20

The  lot  size  is  to  cover  demand  for  a  certain  future  periods.

The  MPS  applies  a  fixed  lot  size  (batch)  of  30,  which  is  scheduled  when  available/projected  available  
balance  would  fall  below  5  units

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Rolling  through  Time

2 3 4 5 6 7 8 9
A  new  forecast  for  period  
Forecast 10 10 10 10 10 15 15 15 2-­‐6
Available 0 -­10 10 0 -­10 -­25 -­10 -­25
The  MPS  needs  to  be  
MPS 30 30 revised  as  the  previous  
plan  will  turn  the  
On-­hand 10 Available  into  negative

2 3 4 5 6 7 8 9
Forecast 10 10 10 10 10 15 15 15
Available

MPS
On-­hand 10
The  top  MPS  doesn’t  look  OK.  Make  a  revision  to  make  it  OK  in  a  lower  table.

Order  Promising  W1

1 2 3 4 5 6 7 8 9
Forecast 5 5 5 5 5 5 15 15 15
Orders 5 3 2
Available 15 10 5 30 25 20 5 20 5
ATP 10 30 30
MPS 30 30
On  hand  20

ATP  =  available  to  promise

ATP  =  on  hand  – total  orders  for  which  the  available  inventories  are  to  be  allocated

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Order  Promising  W1

1 2 3 4 5 6 7 8 9
Forecast 5 5 5 5 5 5 15 15 15
Orders 5 3 2
Available 15 10 5 30 25 20 5 20 5
ATP 10 30 30
MPS 30 30
On  hand  20

Order  Promising  W2

2 3 4 5 6 7 8 9

Forecast 10 10 10 10 10 15 15 15
5 5 2 New  order  (week  2  -­‐ 4)  
Orders
Available 10
ATP
MPS
On  hand  10
Calculate  ATP  in  week  2
Create  a  feasible  MPS  with  lot  size  of  30
ATP  =  MPS  +  On  hand  -­ (Orders)

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MPS  Stability

• A  stable  MPS  translates  into  stable  component  schedules,  which  means  improved  performance  in  
plant  operations.  
• Too  many  changes  – lower  productivity  
• Too  few  changes  – lower  customer  service  levels.  

Increasing  MPS  stability

• Strike  a  balance  where  stability  is  monitored  and  managed  by:  

• Use  firm  planned  order  treatment  for  the  MPS  quantities  
• Frozen  time  periods  for  the  MPS  and  
• Time  fencing  to  establish  clear  guidelines  for  the  kinds  of  changes  that  can  be  made.  

Frozen  Schedule

• This  means  that  for  the  more  recent  time  buckets  it  will  be  very  difficult  (but  still  negotiable)  to  
change  the  sequence  in  which  the  orders  will  be  processed.  

Time  Fencing

• This  is  an  extension  of  the  freeze  concept.  

• Many  companies  set  time  fences  that  specify  periods  in  which  various  types  of  change  can  be  
handled.  
• In  the  Demand  fence  the  forecast  is  ignored  in  calculating  the  available  (difficult  to  change  the  
MPS).  
• The  planning  fence  indicates  the  time  at  which  the  scheduler  should  be  planning  more  MPS  
quantities.  

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