Master Scheduling and Rough-Cut Capacity Planning

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Master Scheduling and Rough-Cut Capacity Planning

• ISQA 459/559
• Mellie Pullman

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Learning Objectives

• Explain the role objectives of a master
  production schedule
• Explain the organizational links to master
  production scheduling
• Develop a master production schedule
• Explain rough-cut capacity planning
• Calculate available-to-promise quantities
• Describe time fence policies

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Role of the MPS

• Aggregate plan
• Specifies the resources available (e.g. regular
  workforce, overtime, subcontracting, allowable
  inventory levels shortages)
• Master production schedule
• Specifies the number when to produce each end
  item (the anticipated build schedule)
• Disaggregates the aggregate plan

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Business Planning Hierarchy
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Planning Links to MPS
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Objectives of MPS

• Maintain the desired customer service level
• Utilize resources efficiently
• Maintain desired inventory levels

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Developing an MPS

• Assume
• Make-to-stock environment
• Production is in fixed quantities of 125 (MPS)
• 110 units in beginning inventory (BI)

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Sample Problem
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Projected Available 110
MPS

• We start with 110 units in Beginning Inventory
• Projected Available How many units are available
  at the end of each time period?
• MPS Replenishment Shipments that need to arrive
  at the beginning of the time period
• Projected Available BI MPS - Forecast

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Step 1

• Find first negative projected available

We start with 110 units in Beginning
Inventory Projected Available How many units
are available at the end of each time period?
(safety stock criteria could be in place gt
5) MPS Replenishment Shipments that need to
arrive at the beginning of the time period
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Schedule Production
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Repeat
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Continue, Until Complete
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Evaluating the MPS

• Customer service issues
• Does available-to-promise inventory satisfy
  customer orders?
• What new orders can we take from customers and
  when?

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Available to Promise

• When a customer places an order, they do not
  expect immediate delivery (negotiable).
• The product will delivered by some later date.
• ATP how many uncommitted units the company has
  available at a given time

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New Calculation for Projected Available
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected Available 110
Available to Promise
MPS

• Projected Available
• BI MPS Max (Customer Orders Forecast)

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Available-to-PromiseAction Bucket
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected Available 110 60 10 85 35 85 10 60 110 60 10 85 35
Available to Promise 50
MPS 125 125 125 125 125

• Action Bucket the current period
• Only calculate ATP during in Action Bucket and
  when MPS occurs
• ATP action bucket BI MPS-customer orders
  before next replenishment
• 110 0 (3525) 50

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Available-to-PromiseReplenishment periods
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected Available 110 60 10 85 35 85 10 60 110 60 10 85 35
Available to Promise 50 80 110 125 115 115
MPS 125 125 125 125 125

• ATP for replenishment periods
• ATP MPS - customer orders between current MPS
  and next scheduled replenishment
• ATP period 3 125 (25 20) 80
• ATP period 5 125 (0 15) 110

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New Order

• Suppose we get an order for 200, can we accept
  this for delivery in period 5?

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Worksheet for New Order for 200
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 35 25 25 20 200 15 0 0 10 0 0 10
Projected Available 110 60 10 85 35
Available to Promise 50 80
MPS 125 125 125 125 125

• Fit in the order for 200 (cant change MPS)

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New Order for 200
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 35 25 25 20 200 15 0 0 10 0 0 10
Projected Available 110 60 10 85 35 -40 -115 -65 -15 -65 -115 -40 -90
Available to Promise 50 80 -90 125 115 115
MPS 125 125 125 125 125

• Negative number in Projected Available might be
  a problem in the future
• Negative number in Available to Promise always a
  problem
• Solution?

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Split up New Order for 200
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 45 25 105 20 110 15 0 0 10 0 0 10
Projected Available 110
Available to Promise
MPS 125 125 125 125 125

• Check to see if this is OK

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Can you now take 2 more orders?
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer Orders 45 25 105 20 110 15 0 50 10 0 0 40
Projected Available 110 60 10 30 -20 -5 -80 -30
Available to Promise 40 0 0
MPS 125 125 125 125 125

• 50 units to be delivered in Period 8
• 30 units to be delivered in Period 12

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Time Fences
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• Frozen no changes are possible with a certain
  period of time (i.e. 8 weeks)
• Time Fence (length of period schedule is frozen,
  liquid, etc.)
• Demand Fence MPS numbers do not change and focus
  is on orders not forecast
• Planning Fence Master Production Scheduler is
  planning more MPS.

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Rough-cut capacity planning

• An estimate of the plans feasibility
• Given the demonstrated capacity of critical
  resources (e.g. direct labor machine time),
  have we overloaded the system?

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Rough-Cut Capacity Planning

• Determine required resources proposed workload

Hours/unit
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Calculate RequiredLabor Hours

• Compare with hours available

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Calculate RequiredMachine Hours

• Compare with hours available