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Master Production Scheduling (MPS) – Basic Techniques

http://www.pom.edu/mpc/lectures_in_manufacturing_planning.htmlecture session 6

• MPS: Role in the MPC System• MPS Defined• MPS Approaches• Single Level MPS Time-Phased Record• Customer Order Processing• Rolling through Time (Transactions)

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Manufacturing Planning and Control System

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MPS Defined• Anticipated Build Schedule – a statement of production not

market demand

• The MPS is:

– Stated in terms of product specifications

– Concerned with product mix while Sales and Operations Planning is concerned with volume

• The MPS is the basis for:

– Making customer delivery promises– Utilizing plant capacity effectively– Attaining the strategic objectives in the sales and operations

plan– Resolving trade-offs between manufacturing and marketing

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MPS Approaches

• Make – to – Stock

• Make – to – Order

• Assemble – to – Order

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Single Level MPS Record Example• The Zero Manufacturing Company ships Product A from the firm's plant

warehouse to satisfy East Coast demand. Currently, the sales forecast for Product A at the Murphysboro plant is 30 units per period.

• Product A is considered a make-to-stock item.– Plant warehouse on hand inventory = 50 units– Safety Stock = 10 units– Lot Size = L4L– Open Order for 30 units due in period 1

• The master production scheduler has heard that an MRP record which uses the forecast for gross requirements and has a lead time of zero can be used for master production scheduling. Complete the following MRP record. How can this be used for master production scheduling?

1 2 3 4 5 6

Projected available balancePlanned order releaseQ = lot for lot; LT = 0; SS = 10

PeriodProduct AGross requirementsScheduled receipts

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Single Level MPS Record Processing

1 2 3 4 5 630 30 30 30 30 3030

Projected available balance 50 50 20 10 10 10 1020 30 30 30Planned order release

Q = lot for lot; LT = 0; SS = 10

PeriodProduct AGross requirementsScheduled receipts

One way viewing an MPS is as the set of planned order releases and scheduled receipts in a record such as above. The problem is that any errors in forecast will be reflected in the on-hand balance. All changes will come in the planned orders. Use of firm planned orders will reduce this instability.

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Customer Order Promising Example

The MPS planner at Murphy Motors uses MPS time-phased records for planning end item production. The planner is currently working on a schedule for the P24. The production lot size is 70 and the safety stock is 5.

1 2 3 4 5 6 7 830 30 30 40 40 40 45 4513 8 4

Available

MPS (completion)

Period

Available to promise

On hand = 20, MPS Lot Size = 70

Item: P24ForecastOrders

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Customer Order Promising Example

a. Complete the MPS time-phased record for P24.

b. Can Murphy accept the following orders? Update the MPS time-phased record for accepted orders.

Order Amount Desired Period1 40 42 30 63 30 24 25 3

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Customer Order Processing Procedure

Item: P24 1 2 3 4 5 6 7 8Forecast 30 30 30 40 40 40 45 45Orders 13 8 4Available 60 30 70 30 60 20 45 70Available to promise 69 66 70 70 70MPS (Completion) 70 70 70 70 70On hand = 20, MPS lot size = 70

Perioda.

b. Order Amount Desired Period1 40 42 30 63 30 24 25 3

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Customer Order Processing Procedure

b.

• The convention of the greater of forecast or orders is used in determining the projected available balance.

Item: P24 1 2 3 4 5 6 7 8Forecast 30 30 30 40 40 40 45 45Orders 13 38 29 40 30Available 60 22 62 22 52 12 37 62Available to promise 39 1 40 70 70MPS (Completion) 70 70 70 70 70On hand = 20, MPS lot size = 70

Period

Order Amount Desired Period Accept (Y or N) 1 40 4 Y2 30 6 Y3 30 2 Y4 25 3 Y

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Rolling Through Time – Transactions Example

The following MPS time phased record has been prepared at the start of period 1.

Item: Smell fresh 1 2 3 4 5 6 7 8Forecast 20 20 20 30 30 30 30 30Orders 5 3 2 Available 50 30 10 30 50 20 40 10Available to promise 60 50 50 50MPS (Completion) 50 50 50 50

Period

On hand = 20, MPS lot size = 50

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Rolling Through Time – Transactions Example

The following events occurred during period 1:

• Actual demand during period 1 was 25 units.• Marketing forecasted that 40 units would be

needed for period 9.• An order for 10 in period 2 was accepted.• An order for 20 in period 4 was accepted.• An order for 6 in period 3 was accepted.• The MPS in period 1 was produced as

planned.

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Rolling through Time -Transactions/ Processing

b. Update the record below after rolling through time.

Beginning On Hand Period 1 = 20

Period 1 Actual Demand = -25

MPS Receipt Into Stock =+50

Beginning on Hand Period 2 = 45

Smell freshPeriod 2 3 4 5 6 7 8 9Forecast 20 20 30 30 30 30 30 40Orders 13 8 20 Available 25 5 25 45 15 35 5 15Available to promise 24 30 50 50 50MPS (Completion) 50 50 50 50On Hand = 45, MPS lot size = 50