Master Production Schedule

MASTER PRODUCTION SCHEDULE

Aggregate planning provides us a set of parameters such as:

1. aggregate inventory or backorder levels2. no. of shifts to be operated3. recruitment or lay off4. anticipated amount of subcontracting5. amount of production.

This is not sufficient for smooth functioning of a firm

What is needed is a plan stated in terms of specific products that are to be produced in certain quantities by certain periods.

Master Production Schedule

Functions of MPS:

1. To translate aggregate plans into specific end items

2. Evaluate alternate schedules

3. Generate material requirement

4. Generate capacity requirements

5. Effective utilization of capacity

Firm orders from knowncustomers

Forecastsof demand from randomcustomers

Aggregateproductplan

Master productionSchedule (MPS)

Materialplanning

Vendor follow up systems

Prodn.Activity control

Rough cut capacity planning

THE MASTER PRODUCTION SCHEDULING

MPS

Placed Orders

Forecasted DemandCurrent and PlannedAvailability, eg.,•Initial Inventory,•Initiated Production,•Subcontracted quantities

Master ProductionSchedule:When & How Muchto produce for eachproduct

CapacityConstraints

CompanyPolicies

EconomicConsiderations

ProductCharact.

PlanningHorizon

Timeunit

CapacityPlanning

Master Production Schedule (MPS): Planned production quantities for end-items in each time period of the planning horizon.

Planning horizon – length of time over which to plan the production schedule. This length of time must exceed the cumulative lead time to replenish an end-item through all production stages.

Time period (or time bucket) – smallest unit of time in which end-item production is scheduled. In practice, time buckets of one week are typical used.

Master Production Schedule (MPS):

Example

Production of 1000 no. 12468 staplers is planned for weeks 1, 2, and 3, followed by no more stapler production until week 6 in which 1500 staplers will be produced.

Product: personal stapler no. 124681 2 3 4 5 6

Planned order releases 1000 1000 1000 0 0 1500

Week

11

Creating The Master Schedule

When we examine the availableinformation for PG1, we see that;

For MPS Item1, the POH quantity ofweek 31 does not meet the forecasted requirement of week 32. So, we need to schedule this item for week 32.

For MPS Item2, the POH quantity ofweek 33 does not meet the forecasted requirement of week 34. So, we need to schedule this item for week 34.

For MPS Item3, the POH quantity ofweek 34 does not meet the forecasted requirement of week 35. So, we need to schedule this item for week 35.

Some companies may use a safety stock level. Item is rescheduled when POH drops down to the safety stock level.

The master schedule (MS) is a presentation of the demand, including the forecast and the backlog (customer orders received), the master production schedule (the supply plan), the projected on hand (POH) inventory.

Based on a average capacity of 180 units per week, we create our initial (first) plan :

The POH for the first week equals the beginning inventory plus the MPS quantity minus the forecast requirements.

For each week we expect to complete a total of 180 units of PG1 products.

Now the question is, “whether do we have sufficient capacity to carry out this plan?”

The next step after preparing a MPS is MRP.

BILL OF MATERIALS (BOM) :

The BOM can be described as a list that specifies the Quantity of each item, ingredient or material needed to assemble, mix or produce an end product

Firm orders from knowncustomers

Forecastsof demand from randomcustomers

Aggregateproductplan

Bill ofmaterialfile

Engineeringdesignchanges

Inventoryrecord file

Inventorytransactions

Master productionSchedule (MPS)

Primary reportsSecondary reports

Planned order schedule for inventory and production control

Exception reportsPlanning reportsReports for performance control

Materialplanning(MRP computer program)