2019 MPS

Lesson 16 – Aggregate Planning
The Production Plan

The aggregate plan shows the overall production by families of product.
The aggregate plan can not be used for production because it
. . . .
is at the group level rather than the individual product level.

-
Once the aggregate accepted, it is broken down into more details to give
Master Schedule (MS)
-
That is, the aggregate plan must be broken down into specific product
requirements.
. . . .
- .
Based on the specific products, then calculating detail of manpower,

material and inventory requirements.
The MS‘disaggregate’ the aggregate plan and specifies number of

individual products to be made in, typically, each week.
MS gives a detailed timetable of planned output for each product and
-
is the first time due-dates are associated with individual products.

- -
Disaggregation
The MS is constrained by the aggregate plan.
That is, the overall production in the MS must equal the production
specified in the aggregate plan.
There may be some differences to allow for short-term variations,

incorrect forecasts, capacity constraints, etc., but should be small.
Copyright – Harland E. Hodges, Ph.D 16-1

Master Schedule (MS)

The overall objective of the MS is to devise a detailed timetable for
individual products, which allows the aggregate plan to be achieved as
efficient as possible.
The MS is a presentation of
 the demand, including the forecast and the backlog (customer orders
received),
 the MPS - master production schedule (the supply plan),
 the projected on-hand (POH) inventory, and
 the available-to-promise (ATP) quantity.
The MS shows quantity and period of specific products. It usually

-
covers 6 to 12 weeks.
The MS then is used as the basis for short term planning.
Relationship of Master Scheduling to other Manufacturing

Planning Control (MPC) activities
The master schedule (MS) is Creates demand Creates demand

Is the “key” in
developing the
a key link in the manufacturing requirements requirements master
schedule
planning and control chain.
The MS interfaces with

marketing, distribution
planning, production planning,
and capacity planning.
The MS drives the material

requirements planning (MRP)
system.
Master scheduling calculates Is the “key”

link
the quantity required to meet Calculates net
requirements
demand requirements from all
sources Input-Output Control &
Operation Scheduling

Master Production Schedule (MPS)
Master schedule states quantity and delivery time of specific

products. -
It says we need 100 push lawnmowers in January.

But it does not say how we get it - from production, or
from inventory.
The master production schedule (MPS) is the primary output of

the MS process. It is the “plan” for providing the supply to meet
the demand.
MPS: Quantity and period of planned production.
MPS determines
the Promised Inventory, and
the Production Requirements available to promise
inventory for each period.
5
What is the MPS?

• The MPS translates the Sales & Operations Plan
(SOP) into a plan for producing specific products in
the future.
• The MPS is the translation of the SOP into
producible products that make up the output.
At the operational level . .

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

As a statement of output, the MPS

• forms the basic communication between the
market and manufacturing.
• is stated in product specification terms (part
numbers) for which there are Bill of Materials
(BOM).
MPS can be stated in terms of

• End-item product designations
• Options or modules from which a variety of end
products could be assembled.
• Numbers of units of an “average” final product
Master Schedule : Inputs

• Inputs to the master schedule include
– The production plan
– The forecast
– Orders from customers
– Additional independent demand
– Inventory levels
– Capacity constraints
• As the forecasts are not totally accurate, MPS gives the first opportunity
to compare actual customer orders with forecast demand.
• Shortages should be usually avoided, so the demand is a set at the
maximum{Forecast , Actual Customer Orders}
• Demand can be met from stock, so current stock levels and production
capacities are compared, and a master production schedule designed to
make up any difference.
• MPS must keep within constraints (set by aggregate plan, the
available capacities, etc.).

Master Schedule : Outputs

• Outputs from the master schedule include
– The Projected Inventory
– The MPS
– The Available To Promise (ATP) (uncommitted inventory)
NOTE: As orders are received, they “consume” available

production and inventory
– Any part not consumed is available-to-promise
(ATP)
• In principle, designing a master schedule is like designing an

aggregate plan.
• It is matter of balancing supply and demand.
MPS : Available-to-Promise
Available-to-Promise is
– the uncommitted portion of a company’s inventory and

planned production, maintained in the master schedule to
support customer order promising.
– The ATP quantity is the uncommitted inventory balance in

the first period and is normally calculated for each period in
which an MPS receipt is scheduled.
– The ATP calculation assumes that the entire ATP will be sold/
consumed before the next scheduled receipt. When calculating
ATP, consider all orders until the next scheduled receipt.
10

Master Scheduling Process

Inputs Outputs
Projected
Beginning Inventory
Inventory
Master
Master
Forecast Production
scheduling
Schedule
Customer 3 inputs and 3 outputs
Orders Available To
Promise
(uncommitted
inventory)
The key idea is: we have a forecast, but it turns into an actual order when we
receive a customer order.
MPS starts with a preliminary calculation of projected inventory.
This reveals “when the production is needed” to get additional inventory.
11
Inputs To Master Scheduling
Projected demand is calculated based on the customer orders

and forecast.
Projected Demand = max (forecast, orders)
12

Outputs of Master Scheduling

Therefore, the Projected Inventory Position (previous inventory position - projected
demand) without any production can be calculated and is shown below:
Customer orders are larger Forecast is larger than

than forecast in week 1 Customer orders in week 2
Forecast is larger than

Customer orders in week 3
13
Master Production Scheduling Process
Negative projected on-hand inventory is the signal for

production.
Policy/Strategy: Suppose the economic production lot size

for this product is 70 units. Then, 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.
14

Outputs Of Master Scheduling

If the lot size for this item is 70 units, we can now build the Master Production
Schedule. We add our first lot in week/day 3 because this is the first negative
inventory position. We then update our Projected Inventory Position.
15

We add our next lot in week/day 5 because this is the next negative inventory position.
We then update our Projected Inventory Position.
16


We add our next lot in week/day 7 because this is the next negative inventory position.
We then update our Projected Inventory Position.
17
We add our next lot in week/day 9 because this is the next negative
inventory position. We then update our Projected Inventory Position,
and have completed the second output of the master scheduling
process, the Master Production Schedule.
18


We are now ready to compute our final output of the master scheduling
process, the Available to Promise (ATP) or uncommitted inventory. This is
inventory which is available to sell and is extremely important to customer
service. The ATP is calculated for week/day 1, 3, 6, 7 and 8.
19

The ATP is calculated for week/day 1 by the following:
Week 1 ATP = Beginning inventory - sum of committed
inventory (customer orders) until the first master
scheduled lot
= 64 - (33 + 20) = 11
20
Copyright – Harland E. Hodges,↑ Ph.D 16-10

can e
Acne Outputs Of Master Scheduling

Week 3 ATP = MPS for week/day 3 (that is 70 units) - sum of
committed inventory (customer
-
orders)until the next
master scheduled lot = 70 - (10 + 4) = 56
up to
2
- in God we have to
sum of
order
Cryto
0000
21

Week 5 ATP = MPS for week/day 5 - sum of committed
inventory (customer orders)until the next master
scheduled lot
= 70 - 2 = 68
22


scheduled lot
= 70 - 0 = 70
23

scheduled lot
= 70 - 0 = 70
24

Updating MPS
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.
25
26

Master Production Schedule
27
⑭Mr Orodiroecei28

Stabilizing The Master Schedule

You can see by these calculations that changes to a Master Schedule
can be disruptive, particularly those in the first few weeks/days of a
schedule.
It is difficult to rearrange schedules, materials plans, and labor plans on
a short notice.
For these reasons, many schedules have varying degrees of changes
that are allowed. Time fences are created to indicate the level of
-
change if any that will be considered .
Frozen Firm Full Open
29

 Specifies what is to be made and when
 Must be in accordance with the aggregate production plan
 Inputs from financial plans, customer demand, engineering,

supplier performance
 As the process moves from planning to execution, each step must

be tested for feasibility
 The MPS is the result of the production planning process

 MPS is established in terms of specific products
 Schedule must be followed for a reasonable length of time
 The MPS is quite often fixed or frozen in the near term part of the
plan
 The MPS is a rolling schedule
 The MPS is a statement of what is to be produced, not a forecast
of demand
30

Hierarchical Planning Process

Items Production Planning Capacity Planning Resource level
Product lines Aggregate Resource
or families Production Plan Requirements Plan Plants
Individual Master Production Rough-Cut Critical work

products Schedule Capacity Plan centers
Material Capacity All work

Components Requirements Plan Requirements Plan centers
Manufacturing Shop Floor Input/Output Individual

operations Schedule Control machines
31
N
we
and

2019 MPS

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2019 MPS

Uploaded by

Copyright:

Available Formats

Lesson 16 – Aggregate Planning

The Production Plan

is at the group level rather than the individual product level.

Based on the specific products, then calculating detail of manpower,

The MS‘disaggregate’ the aggregate plan and specifies number of

is the first time due-dates are associated with individual products.

The MS is constrained by the aggregate plan.

There may be some differences to allow for short-term variations,

Copyright – Harland E. Hodges, Ph.D 16-1

Master Schedule (MS)

The MS shows quantity and period of specific products. It usually

The MS then is used as the basis for short term planning.

Relationship of Master Scheduling to other Manufacturing

The master schedule (MS) is Creates demand Creates demand

The MS interfaces with

The MS drives the material

Master scheduling calculates Is the “key”

Copyright – Harland E. Hodges, Ph.D 16-2

Master Production Schedule (MPS)

Master schedule states quantity and delivery time of specific

It says we need 100 push lawnmowers in January.

The master production schedule (MPS) is the primary output of

MPS: Quantity and period of planned production.

What is the MPS?

At the operational level . .

Copyright – Harland E. Hodges, Ph.D 16-3

As a statement of output, the MPS

MPS can be stated in terms of

Master Schedule : Inputs

Copyright – Harland E. Hodges, Ph.D 16-4

Master Schedule : Outputs

NOTE: As orders are received, they “consume” available

• In principle, designing a master schedule is like designing an

– the uncommitted portion of a company’s inventory and

– The ATP quantity is the uncommitted inventory balance in

Copyright – Harland E. Hodges, Ph.D 16-5

Master Scheduling Process

MPS starts with a preliminary calculation of projected inventory.

This reveals “when the production is needed” to get additional inventory.

Inputs To Master Scheduling

Projected demand is calculated based on the customer orders

Copyright – Harland E. Hodges, Ph.D 16-6

Outputs of Master Scheduling

Customer orders are larger Forecast is larger than

Forecast is larger than

Master Production Scheduling Process

Negative projected on-hand inventory is the signal for

Policy/Strategy: Suppose the economic production lot size

The negative projected inventory of -29 in period 3 calls for

The same calculation continues across the whole planning

Copyright – Harland E. Hodges, Ph.D 16-7

Outputs Of Master Scheduling

Outputs Of Master Scheduling

Copyright – Harland E. Hodges, Ph.D 16-8

Outputs Of Master Scheduling

Outputs of Master Scheduling

Copyright – Harland E. Hodges, Ph.D 16-9

Outputs of Master Scheduling

Outputs Of Master Scheduling

Copyright – Harland E. Hodges,↑ Ph.D 16-10

Acne Outputs Of Master Scheduling

Outputs Of Master Scheduling