Master Planning


Production Planning


·         Setting the overall levels of manufacturing output


·         Concerned with

o   Planning each product family

o   Meeting desired inventory levels

o   Determining resources needed

o   Comparing with available resources


·         Characteristics

o   12 month time horizon

o   Fluctuating or seasonal demand

o   Product families

o   Variety of objectives


·         Strategies of Production Plans

o   Match/chase

§  Produce the amounts demanded at any time

§  Low, stable inventory

§  Must increase capacity (hire workers, overtime, etc) if demand increases

§  Decrease capacity (lay-offs) if demand decreases

o   Level

§  Produce amount equal to average demand, continuously

§  Inventory builds up

§  More accurate forecasting is required.

o   Combination/hybrid

§  Produce at or close to full capacity for some part of the cycle

§  Produces at a lower rate, or not at all, during rest of cycle


·         Types of Production Plans

o   Make-to-Stock:  Finished goods are built and stored in inventory until sold

§  Demand must be constant and predictable

§  Only a few product options exist

§  Delivery times are shorter than time needed to make the product

§  Information needed:  

·         Forecast by time period for the planning horizon

·         Opening inventory

·         Desire ending inventory


Resource requirements planning

·         Comparing the production plan with existing resources and reconciling the gaps


Bill of Resources

·         Shows the quantity of critical resources needed to make one “average” unit of the product group.


Master Production Schedule (MPS):  An Anticipated build schedule that is realistic and achievable.


·         Purpose

o   States requirements for individual end items and options by date and quantity

o   Breaks down the production plan into individual orders and items

·         Objectives

o   Meet desired customer service levels

o   Make best use of resources

o    Keep inventories at desire level

·         Inputs

o   Production Plan

o   Forecast

o   Orders from customers

o   Additional independent demand

o   Inventory levels

o   Capacity constraints

·         Steps in making an MPS

o   Make a preliminary MPS – take your forecast, or expected demand, compared to your current inventory and figure out when you run out of inventory.

o   Rough-cut capacity planning – figure out how much you have to produce to meet your expected demand then determine if you have enough capacity to do so. 

o   Resolve differences – if you don’t have enough capacity to meet your plan, you will have to increase capacity or alter the production plan.


Available-to-Promise (ATP)


·         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  – APICS Dictionary


Time Fences and Zones

·         Frozen:  Actual orders (emergency changes only)

·         Slushy:  Actual and Forecast (trade-offs)

·         Liquid:  Forecast only (changes constrained by production plan)

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