AP n MPS- final

8/3/2019 AP n MPS- final

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AGGREGATE PLANNING &MASTER PRODUCTION

SCHEDULING

Submitted To:- Submitted By:

Dr. SUMEET SINGH JASIAL Kakul Jain (16)Sahiba Singh (20)

Ravi Malik (37)

Piyush Dwivedi (47)


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DEFINITION

Aggregate planning is the process of

developing, analyzing, and maintaining apreliminary, approximate schedule of the

overall operations of an organization.


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Determine the resource capacity needed tomeet demand over an intermediate timehorizon

Aggregaterefers to product lines or familiesAggregate planning matches supply and demand

Objectives

Establish a company wide game plan forallocating resources

Develop an economic strategy for meetingdemand


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FLOW CHART OF AP


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AGGREGATE PLANNING

STRATEGIES

Level Strategy

Chase Strategy

Hybrid Strategy


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CHASE STRATEGY

Capacities (workforce levels, output rates, etc.) are adjusted

to match demand requirements over the planning horizon.

Advantages:Investment in inventory is low, Labor utilization

is kept high

Disadvantage: The cost of adjusting output rates and/or

workforce levels


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LEVEL STRATEGY

Capacities (workforce levels, output rates, etc.) are kept

constant over the planning horizon.

Advantage: Stable output rates and workforce levels

Disadvantages: Greater inventory costs, Increased overtime and

idle time, Resource utilizations that vary over time


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A General procedure for aggregate planning consists ofthe following steps:

1. Determine demand for each period.

2. Determine capacities (regular time, overtime,subcontracting) for each period.

3. Identify company or departmental policies that arepertinent (e.g., maintain a safety stock of 5 percent ofdemand, maintain a reasonably stable workforce).

4. Determine unit costs for regular time, overtime,subcontracting, holding inventories, back orders,

layoffs, and other relevant costs.5. Develop alternative plans and compute the cost for

each.

6. If satisfactory plans emerge, select the one that bestsatisfies objectives. Otherwise, return to step 5.


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LINEAR APPROACH TO AGGREGATE PLANNING


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AGGREGATE PLANNING USING LEVELSTRATEGY


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Planners for a company that makes several models of skateboards areabout to prepare the aggregate plan that will cover six periods. They

have assembled the following information:They now want to evaluate a plan that calls for a steady rate of regular-time output, mainly using inventory to absorb the uneven demand butallowing some backlog. Overtime and subcontracting are not usedbecause they want steady output. They intend to start with zeroinventory on hand in the first period. Prepare an aggregate plan and

determine its cost using the preceding information. Assume a leveloutput rate of 300 units (skateboards) per period with regular time (i.e.,1,8006 = 300). Note that the planned ending inventory is zero. Thereare 15 workers, and each can produce 20 skateboards per period.


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AGGREGATE PLANNING USING CHASESTRATEGY


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After reviewing the plan developed in the precedingexample, planners have decided to develop analternative plan. They have learned that one person isabout to retire from the company. Rather than replace

that person, they would like to stay with the smallerworkforce and use overtime to make up for the lostoutput. The reduced regular-time output is 280 units perperiod. The maximum amount of overtime output per

period is 40 units. Develop a plan and compare it to theprevious one.


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TRANSPORTATION NOTATION FORAGGREGATE PLANNING


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DISAGGREGATING THE AGGREGATE

PLANMoving from the aggregate plan to a master schedule


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WHAT IS MASTER PRODUCTION

SCHEDULING?

Start with Aggregate plan

Aggregate Sales Output level designed to meet targets

Disaggregates

Converts into specific schedule for each item


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MASTER PRODUCTION SCHEDULE

Provides basis for:

Making good use of manufacturing resources

Making customer delivery promises

Resolving tradeoffs between sales andmanufacturing

Attaining strategic objectives in the sales and

operations plan


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THE MASTER SCHEDULING PROCESS


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No Change

+/- 5%

Change

+/- 10%

Change

+/- 20%

ChangeFrozen

FirmFull

Open

1-2

weeks2-4

weeks

4-6

weeks6+weeks

MPS TIME FENCES

Time to due

date


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MASTER PRODUCTION SCHEDULING

TECHNIQUES

Available = inventory position at end of week

= starting inventory + MPS

forecast

Plan to have positive inventory level

Buffer in case production below plan

Or demand higher than anticipated MPS row is amount to make, MRP system has to

figure out how to make it

A ailable


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MPS TECHNIQUES EXAMPLE

Week

1 2 3 4 5 6 7 8 9 10 11 12Forecast 5 5 5 5 5 5 15 15 15 15 15 15

Available 25 30 35 40 45 50 45 40 35 30 25 20

MPS 10 10 10 10 10 10 10 10 10 10 10 10

On hand 20

Lot size Q = 10; OH1 = 20 is from previous periods

A level production MPS:

Available:

Period 1: 20+10-5 = 25

Period 2: 25+10-5 = 30

etc.

MPS is constant

Available:


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MPS TECHNIQUES EXAMPLE

Week

1 2 3 4 5 6 7 8 9 10 11 12Forecast 5 5 5 5 5 5 15 15 15 15 15 15

Available 20 20 20 20 20 20 20 20 20 20 20 20

MPS 5 5 5 5 5 5 15 15 15 15 15 15

On hand 20

Lot size Q = variable; OH1 = 20 is from previous periods

A chase production MPS:

MPS is variable

Available:

Period 1: 20+5-5 = 20

Period 2: 20+5-5 = 20

etc.


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Week 1

Week

1 2 3 4 5 6 7 8 9 10 11 12

Forecast 5 5 5 5 5 5 15 15 15 15 15 15

Available 15 10 5 30 25 20 5 20 5 20 5 20

MPS 30 30 30 30On hand 20

Lot size Q = 30; OH1 = 20 is from previous periods

Consider the following MPS.Forecasts for weeks 1 6 wereestimated to be 5 units

Available:

Period 1: 20-5 = 15

Period 2: 15-5 = 10Period 3: 10-5 = 5

Period 4: 5-5+30 = 30


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Week 2Week

2 3 4 5 6 7 8 9 10 11 12 13

Forecast 10 10 10 10 10 15 15 15 15 15 15 15

Available 0 -10 10 0 -10 -25 -10 -25 -10 -25 -10 -25

MPS 30 30 30 30

On hand 10

Lot size Q = 30; OH2

= AV1

= 10

In week 2, forecasts for weeks 2 6

were revised from 5 to 10 units.Actual demand in period 1 was 10units. As the Available row indicates,unless MPS is revised, demandfrom period 3 on will not be met,except for period 5

Available:

Period 1: 20-10 = 10Period 2: 10-10 = 0

Period 3: 0-10 = -10

Period 4: -10-10+30 = 10

etc.

Available:


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Week 2Week

2 3 4 5 6 7 8 9 10 11 12 13

Forecast 10 10 10 10 10 15 15 15 15 15 15 15

Available 30 20 10 30 20 5 20 5 20 5 20 5

MPS 30 30 30 30 30

On hand 10

Lot size Q = 30; OH2 = AV1 = 10

Revised MPS meets increased demands in periods 1 6. AllAvailable quantities are nonnegative

Available:

Period 1: 20-10 = 10

Period 2: 10+30-10 = 30

Period 3: 30-10 = 20

Period 4: 20-10 = 10Period 5: 10+30-10 = 30

etc.


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AVAILABLE-TO-PROMISE (ATP)

Quantity of items that can be promised tothe customer

Difference between planned production andcustomer orders already received

AT in period 1 = (On-hand quantity + MPS in period 1)

- (CO until the next period of planned production)ATP in period n = (MPS in periodn)

- (CO until the next period of planned production)


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ROUGH-CUT CAPACITY PLANNING

Feasibility check of master production schedule

Historical ratios of loads placed on work centersused

Workloads assumed to fall in period and items

demanded


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MANUFACTURING

ENVIRONMENTS

Production-to-Stock (PTS) Eg.- Motorcycles

Assemble-to-Order (ATO)- Eg. Fast foodrestaurants

Make-to-Order (MTO) Eg. Restaurants

How to manage

the increasing

level ofcomplexity and

uncertainty?


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MARUTI SUZUKI ALTO


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Maruti Suzuki produces Alto on a production-to-stock

basis.

The demand is shown as:


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The safety stock for the inventory is not

fixed.

The fixed lot size is 8000.

The beginning inventory is 400.The final assembly line has a weekly

capacity of 99 hours available.

Each Alto car requires 22 seconds of final

assembly.


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As the plant is already under-loaded, there can be morenumber of cars that can be manufactured during the weeks.

ROUGH- CUT CAPACITY PLANNING


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CONCLUSION

The MPS unit should reflect the companys

approach to the business environment in which it

operates.

Available-to-promise information should be derivedfrom the MPS and provided to the sales

department.

A final assembly schedule should be used to convert

the anticipated build schedule into the final buildschedule.


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The MPS activity & the role of the master

production scheduler must be clearly defined

organizationally.

The MPS can be usefully considered as a set of firmplanned orders.

The MPS should be evaluated with a formal

performance measurement system.

AP n MPS- final

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