Aggregate Planning

MSP
MRP I,II
Aggregate Planing

● Aggregate planning is the process of developing, analyzing, and

maintaining a preliminary, approximate schedule of the overall
operations of an organization.
● The aggregate plan generally contains targeted sales forecasts,
production levels, inventory levels, and customer backlogs.
● In simple terms, aggregate planning is an attempt to balance capacity
and demand in such a way that costs are minimized.
Aggregate Planing
● Determine the resource capacity needed to meet demand over an
intermediate time horizon.
○ Aggregate refers to product lines or families.
○ Aggregate planning matches supply and demand.
● Objective
○ Establish a company wide game plan for allocating resources.
○ Develop an economic strategy for meeting demand.
Master Production Schedule
● The master production schedule (MPS) is the overall plan to assess the
production of your finished goods.
● The mps sets the quantity of each end item(finished product) to be produced
in each time period (week/month or quarter) of the short-range planning
horizon.
Master Production Schedule
● The MPS gives the information about the quantities and timing of the planned
production of a product.
● Start with Aggregate plan (Aggregate Sales & Ops Plan)
MRP I & MRP II
● The MRP is a planning system that allows you to manage the production
resources of an organization.
● MRP I stands for “Material Requirements Planning”. It is basically a material
planning and management system through the use of software. MRP I solves
some issues within any manufacturing process, such as:
○ What materials to buy
○ How much material to buy
○ When to buy the materials
MRP I

Inputs
1. The Production Master Plan or MPS, which provides independent product
demand.
2. The Material Inventory, which means the amount of raw materials, semi-
finished goods and finished products available.
3. The Bill of Materials or BOM, combining the components to produce a unit of
product, the standardized quantities to use and their parent-child relationship.
MRP 1
Outputs
And the outputs obtained will be:
1. A Recommended Production Schedule
2. A Recommended Purchasing Schedule.
MRP II
● MRP II is defined as “Manufacturing Resource Planning” and was born in the
80s.
● To offer a broader planning and control tool to its predecessor, the MRP 1
● MRP 2 is a computer-based system that creates production schedules
including the arrival of materials, machine and labor.
● In addition to answering questions about what, how many and when to
purchase materials from MRP I, MRP II answers the following questions:
○ What resources are necessary?
○ What amount of resources?
○ When will these resources be necessary?