1

Introduction to Operations Management

Aggregate Production Planning (APP) Aggregate Production Planning (APP) (Ch. 13) and(Ch. 13) and

Material Requirements Planning Material Requirements Planning (MRP) (Ch. 14)(MRP) (Ch. 14)

Hansoo Kim ( 金翰秀 )Dept. of Management Information Systems,

YUST

2

Schedule

11/25 – Inventory Management 12/2 – APP & MRP 12/9 – ERP & Review! 12/16 – 2nd Exam – Final Exam

3

OM Overview

Class Overview(Ch. 0)

Project Management

(Ch. 17)

Strategic Capacity Planning(Ch. 5, 5S)

Operations, Productivity, and Strategy

(Ch. 1, 2)

Mgmt of Quality/Six Sigma Quality

(Ch. 9, 10)

Supply Chain Management

(Ch 11)

Location Planning and Analysis

(Ch. 8)

Demand MgmtForecasting

(Ch 3)

Inventory Management

(Ch. 12)

Aggregated Planning

(Ch. 13)

Queueing/ Simulation

(Ch. 18)

MRP & ERP (Ch 14)

JIT & Lean Mfg System

(Ch. 15)

Term Project

Process Selection/

Facility Layout; LP(Ch. 6, 6S)X X X X X

XX XX

XX XX

4

Today’s Outline

총괄생산계획 (APP) 에 대하여 .. 자재소요계획 (MRP) 에 대하여 ..

5

어떻게 수요를 만족 시킬 것인가 ?

MonthExpected Demand

ProductionDays

Demand per Day

Jan.Feb.Mar.Apr.May.Jun.

900700800

1,2001,5001,100

221821212220

413938576855

Total 6,200 124

Inventory Carrying Cost ( 재고보관비 )Subcontracting cost per unit ( 단위 외주비용 )Average pay rate ( 평균 임금률 )Over time pay rate ( 잔업 임금률 )Labor-hours to produce a unit ( 단위 노동시간 )Cost of increasing production rate ( 생산률 증가비 )Cost of decreasing daily production rate ( 생산률 감소비 )

$ 5 per unit per month$ 10 per unit$ 40 per day$ 7 per hour (above 8hrs per day)1.6 hr per unit$300 per unit$600 per unit

6

첫번째 전략 : 노동생산률을 일정하게 No Change Workforce

노동력에 변화를 주지 않는다 . No change workforce (No Hire No Layoffs)

잔업과 외주를 사용하지 않는다 .No Overtime or No subcontract

오직 재고를 사용하여 계획한다 .Use inventory!

7

월별 수요 및 생산률

0

10

20

30

40

50

60

70

Pro

duction r

ate

per

work

ing d

ay

Jan Feb Mar Apr May Jun

ForecastDemand

22 18 21 21 22 20

6200/124 = 50

8

첫번째 전략 분석 using Excel

Data

Period DemandReg TimeProduction

OvertimeProduction

SubcontractProduction

Jan 900 1100 0Feb 700 900 0Mar 800 1050 0Apr 1200 1050 0May 1500 1100 0Jun 1100 1000 0Total 6200 6200 0 0Average 1033.333Cost $49,600 $0 $0Total Cost $58,850

Costs (per unit)Reg time 8Overtime 11.2Subcontract 10Holding 5

P rate 50 per dayWorking Days P rate /m

22 110018 90021 105021 105022 110020 1000

6200

Inventory Holding200 200400 400650 650500 500100 100

0 01850

$9,250

7216

Inventory Carrying Cost ( 재고보관비 )=

$ 5 per unit per month

9

두번째 전략 : 일정한 노동생산률 유지 , 외주 활용

수요가 가장 낮은 달 (3 월 , 38 개 /월 ) 의

생산률을 유지 시키며 , 외주 (Subcontract) 를 적극 활용한다 .

10

두번째 전략 분석 Using ExcelCosts (per unit)Reg time 8 :=1.6*5Overtime 11.2Subcontract 10Holding 5ShortageIncrease 0Decrease 0

Starting ConditionsInitial inventory 0Units last period

38unit/day 38Data

Period DemandReg TimeProduction

OvertimeProduction

SubcontractProduction

Jan 900 836 0 64Feb 700 684 0 16Mar 800 798 0 2Apr 1200 798 0 402May 1500 836 0 664Jun 1100 760 0 340Total 6200 4712 0 1488Average 1033.333Cost $37,696 $0 $14,880Total Cost $52,576

11

세번째 전략 : 노동력을 증가 감소 시킨다

Month`Expected Demand

Demand per Day

Production Cost

Hire Cost($300/unit)

LayoffCost

($600/unit)Total Cost

Jan.Feb.Mar.Apr.May.Jun.

900700800

1,2001,5001,100

413938576855

$7200560064009600

120008800

---$5700$3300-

-$1200$600--$7800

$720068007000

153001530016600

Total 6,200 $49600 $9000 $9600 $68200

12

계획 기간Planning Horizon

Today 3 Months 1 year 5 years

Planning Horizon

Short-range plansJob assignmentsOrderingJob schedulingDispatching

Intermediate-range plansSales planningProduction planning and budgetingSetting employment, inventory, subcontracting levelsAnalyzing operating plans

Long-range plansR&DNew product plansCapital expensesFacility location, expansion

Responsible: Operations managers, supervisors, foremen

Responsible: Operations managers

Responsible: Top executives

13

총괄생산계획 (AP) 요건들 판매 생산 등을 통합적으로 측정할 단위가 있어야 한다 .

Logical overall unit for measuring sales and outputs 중 단기 계획에 따른 통합된 (aggregated) 수요예측치가

있어야 한다 . Forecast of demand for intermediate planning period in

these aggregate units 비용을 계산하는 방법이 있어야 한다 .

Method for determining costs 최소의 비용의 방법을 결정하기 위해 , 수요예측치와 비용을

결합하는 모델이 필요하다 . Model that combines forecasts and costs so that planning

decisions can be made

14

총괄생산계획과 관련 있는 항목들…

AggregatePlan for

Production

DemandForecasts,

orders

MasterProduction

Schedule, and MRP systems

Detailed WorkSchedules

ExternalCapacity

Subcontractors

Inventory OnHand

Raw MaterialsAvailable

Work Force

Marketplaceand Demand

Research andTechnology

ProductDecisions

ProcessPlanning & Capacity

Decisions

15

총괄생산계획 APP, or AP(Aggregate Production Planning)

회사의 자원을 이용하여 시장의 수요를 충족시키는 계획 Matches market demand to company resources

계획기간은 보통 3 개월에서 12 개월 정도 Plans production 3 months to 12 months in advance

단일 품목에 대한 계획이 아닌 , 관련 제품군에 대한 계획 Combines (‘aggregates’) production

주로 , 수요 (demand) 자원 (Resources), 그리고 생산능력 (capacity) 의 용어로 표현된다 .

Expresses demand, resources, and capacity in general terms

경제적으로 수요를 만족시키기 위한 전략을 개발한다 . Develops a strategy for economically meeting demand

회사의 자원을 어떻게 배치해야 하는가 하는 계획을 수립한다 . Establishes a company-wide game plan for allocating

resources

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AP 의 목표 수요 충족

Meet demand 생산능력의 효율적 사용

Use capacity efficiently 재고정책에 부합

Meet inventory policy 비용의 최소화

Minimize cost 노동비 (Labor cost) 재고비 (Inventory) 설비비 (Plant &

equipment) 외주비 (Subcontract)

17

AP 전략 : 순수전략 (Pure Strategy)

생산능력 변화 전략 Capacity Options — change capacity: 재고 수준의 변화 , changing inventory levels 고용 /해고를 통한 작업자의 수의 변화 , varying

work force size by hiring or layoffs 잔업 및 휴가등을 통한 생산 능력의 변화 ,

varying production capacity through overtime or idle time

외주 , subcontracting 비정규직 사원 활용 , using part-time workers

18

AP 전략 : 순수전략 (Pure Strategy)

수요변화 전략 ,Demand Options — change demand:

수요에 영향을 줌 , influencing demand 부재고 (Back-order) 발생 시킴 ,

backordering during high demand periods

계절적 변동을 최소화 시키는 혼합생산 , counter-seasonal product mixing

19

두 극단적 전략

Level Strategy

Chase Strategy

수요의 변동에 따른

생산의 변동

생산률 고정

20

혼합전략 , Mixed strategy 2 개 이상의 AP 전략을 함께 사용하는 복합적인 전략

Combines 2 or more aggregate scheduling options

고정생산 전략 , Level scheduling strategy 고정된 생산 , Produce same amount every day 노동생산 수준을 일정하게 고정 , Keep work force

level constant 노동생산 수준 이외의 다른 대안을 활용 , Vary non-

work force capacity or demand options 생산비 최소화 추구하는 경우 , Often results in

lowest production costs

AP 전략들…

21

AP Using Pure Strategies

Hiring costHiring cost = $100 per worker= $100 per worker

Firing costFiring cost = $500 per worker= $500 per worker

Inventory carrying costInventory carrying cost = $0.50 pound per quarter= $0.50 pound per quarter

Production per employeeProduction per employee = 1,000 pounds per quarter= 1,000 pounds per quarter

Beginning work forceBeginning work force = 100 workers= 100 workers

QUARTERQUARTER SALES FORECAST (LB)SALES FORECAST (LB)

SpringSpring 80,00080,000SummerSummer 50,00050,000FallFall 120,000120,000WinterWinter 150,000150,000

22

AP Using Pure Strategies

Hiring costHiring cost = $100 per worker= $100 per worker

Firing costFiring cost = $500 per worker= $500 per worker

Inventory carrying costInventory carrying cost = $0.50 pound per quarter= $0.50 pound per quarter

Production per employeeProduction per employee = 1,000 pounds per quarter= 1,000 pounds per quarter

Beginning work forceBeginning work force = 100 workers= 100 workers

QUARTERQUARTER SALES FORECAST (LB)SALES FORECAST (LB)

SpringSpring 80,00080,000SummerSummer 50,00050,000FallFall 120,000120,000WinterWinter 150,000150,000

Level production

= 100,000 pounds

(50,000 + 120,000 + 150,000 + 80,000)4

Example 9.1Example 9.1

23

Level Production Strategy

Example 9.1Example 9.1

SpringSpring 80,00080,000 100,000100,000 20,00020,000SummerSummer 50,00050,000 100,000100,000 70,00070,000FallFall 120,000120,000 100,000100,000 50,00050,000WinterWinter 150,000150,000 100,000100,000 00

400,000400,000 140,000140,000

Cost = 140,000 pounds x 0.50 per pound = $70,000Cost = 140,000 pounds x 0.50 per pound = $70,000

SALESSALES PRODUCTIONPRODUCTIONQUARTERQUARTER FORECASTFORECAST PLANPLAN INVENTORYINVENTORY

24

SpringSpring 80,00080,000 80,00080,000 8080 00 2020SummerSummer 50,00050,000 50,00050,000 5050 00 3030FallFall 120,000120,000 120,000120,000 120120 7070 00WinterWinter 150,000150,000 150,000150,000 150150 3030 00

100100 5050

SALESSALES PRODUCTIONPRODUCTION WORKERSWORKERS WORKERSWORKERS WORKERSWORKERSQUARTERQUARTER FORECASTFORECAST PLANPLAN NEEDEDNEEDED HIREDHIRED FIREDFIRED

CostCost = (100 workers hired x $100) + (50 workers fired x $500)= (100 workers hired x $100) + (50 workers fired x $500)

= $10,000 + 25,000 = $35,000 = $10,000 + 25,000 = $35,000

Chase Demand Strategy

25

AP Using Mixed Strategies

Production per employeeProduction per employee= 100 cases per month= 100 cases per monthWage rateWage rate = $10 per case for regular production= $10 per case for regular production

= $15 per case for overtime= $15 per case for overtime= $25 for subcontracting= $25 for subcontracting

Hiring costHiring cost = $100 per worker= $100 per workerFiring costFiring cost = $500 per worker= $500 per worker

Inventory carrying costInventory carrying cost = $1.00 case per month= $1.00 case per monthBeginning work forceBeginning work force = 10 workers= 10 workers

JanuaryJanuary 10001000 JulyJuly 500500FebruaryFebruary 400400 AugustAugust 500500MarchMarch 400400 SeptemberSeptember 10001000AprilApril 400400 OctoberOctober 15001500MayMay 400400 NovemberNovember 25002500JuneJune 400400 DecemberDecember 30003000

MONTHMONTH DEMAND (CASES)DEMAND (CASES) MONTHMONTH DEMAND (CASES)DEMAND (CASES)

26

AP by Linear ProgrammingMinimize Z =Minimize Z = $100 ($100 (HH11 + + HH22 + + HH33 + + HH44))

+ $500 (+ $500 (FF11 + + FF22 + + FF33 + + FF44))

+ $0.50 (+ $0.50 (II11 + + II22 + + I I33 + + II44))

Subject toSubject to

PP11 - - II11 = 80,000= 80,000 (1)(1)

DemandDemand II11 + + PP22 - - II22 = 50,000= 50,000 (2)(2)

constraintsconstraints II22 + + PP33 - - II33 = 120,000= 120,000 (3)(3)

II33 + + PP44 - - II44 = 150,000= 150,000 (4)(4)

ProductionProduction 1000 1000 WW11 = = PP11 (5)(5)

constraintsconstraints 1000 1000 WW22 = = PP22 (6)(6)

1000 1000 WW33 = = PP33 (7)(7)

1000 1000 WW44 = = PP44 (8)(8)

100 + 100 + HH11 - - FF11 = = WW11 (9)(9)

Work forceWork force WW11 + + HH22 - - FF22 = = WW22 (10)(10)

constraintsconstraints WW22 + + HH33 - - FF33 = = WW33 (11)(11)

WW33 + + HH44 - - FF44 = = WW44 (12)(12)

wherewhereHHtt == # hired for period # hired for period tt

FFtt == # fired for period # fired for period tt

IItt == inventory at endinventory at end

of period of period ttPPtt == units producedunits produced

in periodin period ttWWtt == workforce sizeworkforce size

for periodfor period tt

27

MRP

Material Requirement Planning

28

AP 의 입력정보들 ..

Aggregate Production Plan

MarketingCustomerDemand

EngineeringDesign

Completion

ManagementReturn on

InvestmentCapital

HumanResourcesManpowerPlanning

ProcurementSupplier

Performance

FinanceCash Flow

ProductionCapacityInventory

29

생산계획 수립과정

Change master production schedule?

Execute material plans

Execute capacity plans

Detail capacity plan

Material Requirements Material Requirements PlanPlan

Master production schedule (MPS)

Aggregate production plan

Change requirements?

Change capacity?

RealisticNo

Yes

Change production plan?

Is capacity plan being met?

Is execution meeting the

plan?

30

AP->MPS

1,2001,500

Aggregate Production PlanAggregate Production Plan (shows the total quantity of amplifiers)

10030075 watt amplifier

450450500500150 watt amplifier

100100100100240 watt amplifier

Master Production Master Production ScheduleSchedule (Shows the specific type and quantity of amplifier to be produced)

87654321Weeks

FebruaryJanuaryMonths

31

제품을 만드는데 필요한 부품의 종류와 수량을 기록한 자료구조

제품의 구조를 Tree 형식으로 나타낸다 Parents: 상위 레벨 제품들

Items above given level Children: 하위 레벨 제품들

Items below given level표현 규칙

최 하위 레벨에 맞춘다 (Shows low-level coding) Lowest level in structure item occurs Top level is 0; next level is 1 etc.

Bill-of-Material (BOM)

32

예 ) BOM for “Awesome” A

33

Bicycle(1)P/N 1000

Handle Bars (1)P/N 1001

Frame Assembly (1)P/N 1002

Wheels (2)P/N 1003

Frame (1)P/N 1004

예 ) BOM for Bicycle

34

Time-Phased Product Structure

1 2 3 4 5 6 7 8

3 weeksF

2 weeksE

A

1 week1 week

CG2 weeks

D1 week

E2 weeks

Start production of D

D1 week

B

2 weeks to produce

Must have D and E completed here so production can begin on

B

35

예 ) BOM for Stool ( 의자 )Indented BOM Graphical BOM

StoolBase (1)

Legs (4)Bolts (2)

Seat (1)Bolts (2)

Stool

Base (1)

Legs (4)

Level 0

Level 1Seat (1)

Bolts (4) Bolts (2) Level 2

Note: bolts are treated at lowest level in which they occur for MRP calcs. Actually, they might be left off BOM altogether in practice. (Low Level Coding)

36

예 ) MRP 계산 (1/2)

Item: Stool (Leadtime = 1 week)

Week 0 1 2 3 4 5 6 Gross Reqs 120 Sched Receipts Proj Inventory 20 20 20 20 20 -100 -100 Net Reqs 100 Planned Orders 100

Item: Base (Leadtime = 1 week)

Week 0 1 2 3 4 5 6Gross Reqs 100Sched ReceiptsProj Inventory 0 0 0 0 -100 -100 -100Net Reqs 100Planned Orders 100

37

예 ) MRP 계산 (2/2)

Item: Legs (Leadtime = 2 weeks)

Week 0 1 2 3 4 5 6 Gross Reqs 400 Sched Receipts 200 Proj Inventory 0 0 200 -200 -200 -200 -200 Net Reqs 200 Planned Orders 200

BOM explosion

38

1 2 3 4 5

Gross Requirements 2 20 25 15

Scheduled Receipts 5 30

Available 25 23 33 33 8

Net Requirements 7

Planned Order Receipts 7

Planned Order Releases 7

1 2 3 4 5

Gross Requirements 2 20 25 15

Scheduled Receipts 5 30

Available 25 23 33 33 8

Net Requirements 7

Planned Order Receipts 7

Planned Order Releases 7

Manufacturing computer information computer information systemsystem

Determines quantity & timing of quantity & timing of dependent demand itemsdependent demand items

© 1995 Corel Corp.

자재소요계획 Material Requirements Planning (MRP)

39

Computer systemMainly discrete productsAccurate bill-of-materialbill-of-materialAccurate inventory statusinventory status

99% inventory accuracy

Stable lead timesStable lead times

© 1984-1994 T/Maker Co.

MRP Requirements

40

고객만족도 증대 Increased customer satisfaction due to meeting

delivery schedules 시장의 변화에 빠른 대응

Faster response to market changes노동 /설비 가동률 향상

Improved labor & equipment utilization보다 효율적인 재고 계획 및 관리 방법

Better inventory planning & scheduling고객 만족도의 손해 없이 , 재고 수준을 낮춤

Reduced inventory levels without reduced customer service

MRP 유익들…

41

MRP System 의 구조

Master ProductionScheduleBOM

Lead Times

(Item Master File)

Inventory Data

Purchasing data

MRPMRP planning programs

(computer and software)

MRP by Period Report

MRP by date report

Planned order report

Purchase advice

Exception report

Exception report

42

BOM for “Awesome” A

43

Gross Material Requirements Plan for 50 “Awesome A” Speaker Kits

44

Derivation of Master Schedule

Therefore, these are the gross requirements

for B

Periods

10 101 2 3

Master schedule for B sold directly

40 50 15

A

CB

5 6 7 8 9 10 11

Lead time = 4 for AMaster schedule for A

40 20 30

S

B C

8 9 10 1211 13

Lead time = 6 for SMaster schedule for S

10 40+10 = 50 40 50 20 15+30

= 45

1 2 3 4 5 6 7 8Periods

Gross requirements: B

45

Lot-Sizing Techniques

Lot-for-lot Economic Order Quantity Part Period Balancing Fixed Order Period

46

MRP Lot-Sizing Problem: Lot-for-Lot Techniques

Total Cost = 100 * 7 = $700

47

MRP Lot-Sizing Problem: EOQ Technique

735$52

10100)521()5227(2

52

102

DhS

Total Total CostCost

48

Part Period Balancing Tech. Calculation

Holding Cost = $1/unit,week, Setup Cost = $100, Lead Time = 1 week

Economic Part Period (EPP) = Setup Cost Holding Cost = 100/1 = 100 unit

1 2 3 4 5 6 7 8 9 10

35 30 40 0 10 40 30 0 30 55Demand

PeriodsCombined

CumulativeNet Reqmt

Part PeriodCost

Setup Holding Total

22,32,3,42,3,4,52,3,4,5,6--------66,76,7,86,7,8,9--------10

30707080120----407070100----55

040 = 40*14070 = 40*1 + 10*3230 = 40*1 + 10*3 + 40*4-------------------030 = 30*130 = 30*1+0*2120 = 30*1 + 30*3-------------------0

100

---

100---100

70

--

120--0

170

---

220---100

300 190 $490

49

MRP Lot-Sizing Problem: PPB Technique

50

Fixed Order Period (FOP): 3 periods

1 2 3 4 5 6 7 8 9 10

Gross Req. 35 30 40 0 10 40 30 0 30 55

Sched. Receipt

Projt on Hand (35)

35 0 40 0 0 40 30 0 0 55

Net Requirement.

0 30 0 0 10 0 0 0 30 0

Planed order Receipt

0

70=30+40+0

0 0 80 0 0 0 85 0

Planed OrderRelease

70 0 0 80 0 0 0 85 0 0

Holding Cost = $1/unit week, Setup Cost = $100Lead Time = 1week

Total Cost = 100*3 + 40*1 + 40*1 + 30*2 + 55 = $495Total Cost = 100*3 + 40*1 + 40*1 + 30*2 + 55 = $495

51

Total Cost Comparison

Total cost comparison by Lot sizing Techniques

L4L = $700 EOQ = $735 PPB = $490 **PPB = $490 ** FOP = $495

52

MRP and ERP Information Flows, Integrated with Other Systems

53

MRP in Services

Can be used when demand for service or service items is directly related to or derived from demand for other services restaurant - rolls required for each meal hospitals - implements for surgery etc.

54

Product Structure, Bill of Materials, Bill of Labor for Veal Picante

55

Announcement

HW Ch.14

Example 1, 2 Solved Problem 1, 2

Ch. 13 Example 1, 2

다음주에 ERP & Review 시간입니다