What is Master Production Schedule or MPS?A Master Production
Schedule or MPS is the plan that a company has developed for
production, inventory, staffing, etc. It sets the quantity of each
end item to be completed in each week of a short-range planning
horizon. A Master Production Schedule is the master of all
schedules. It is a plan for future production of end items.The
Master Production Schedule gives production, planning, purchasing,
and top management the information needed to plan and control the
manufacturing operation. The application ties overall business
planning and forecasting to detail operations through the Master
Production Schedule. The Master Production Schedule will drive
detailed material and production requirements in the Material
Requirements Planning module.
3 rd. year -Industrial Eng. Chapter 3 Production Planning &
control
2011- 2012 Dr. May George
10
Fig. (1) an overview of manufacturing planning activities
MPS INPUTS:
1. Forecast Demand
2. Production Costs
3. Inventory Costs
4. Customer Orders
5. Inventory Levels
6. Supply
7. Lot Size
8. Production Lead Time
9. Capacity
A comparison of different product type
strategies are depicted in the fig. below:
Type A Type X Type V
Fig.(2) a comparison of MPS, BOM and FAS MTS=Make To Stock, ATO=
Assemble To Order
MTO= Make To Order FAS= Final Assemble Scheduledule
MPS OUTPUT (production plan):
1. Amounts to be Produced
2. Staffing Levels
3. Quantity Available to Promise
4. Projected Available Balance
Materials requirements planning
Materials requirements planning (MRP) is used for determining
the number of parts, components, and materials needed to produce a
product (end item). In brief, MRP is a means designed to answer
what, when, how many for each part, component, subassemblies and
final products. MRP is most valuable in industries where products
are assembled in batches (batch shop, assemble to stock, assemble
to order.)
MRP provides time scheduling information specifying when each of
the subassemblies, parts, and components should be ordered or
produced.
The objectives of MRP are to determine quantity and timing of
material requirements to keep schedule priorities updated and
valid.
MRP needs three inputs:
1. The authorized MPS,
2. The BOM file, and
3. The inventory records file.
Once the MPS has been input, MRP checks inventory availability.
If a need is determined, MRP checks the BOM file for material
needed, and then generates planned orders.
MRP outputs are:
1. Planned orders to be released at a future time.
2. Order release notices to execute the planned orders.
3. Changes in due dates of open orders due to rescheduling.
4. Cancellations or suspensions of open orders due to
cancellation or suspension of orders on the master production
schedule.
Inventory status data: Planned order releases. The inventory
records consist of:
1. Gross requirements: The total period demand for the item
2. Scheduled receipts: An open order with an assigned due
date
3. Projected available: The projected inventory balance for the
period
4. Planned orders: Quantities & released dates suggested by
the MRP system
Fig. (3) MRP system
Material Requirements Planning can provide the following
benefits:
1. Reduced Inventory Levels
2. Reduced Component Shortages
3. Improved Shipping Performance
4. Improved Customer Service
5. Improved Productivity
6. Simplified and Accurate Scheduling
7. Reduced Purchasing Cost
8. Improve Production Schedules
9. Reduced Manufacturing Cost
10. Reduced Lead Times
11. Less Scrap and Rework
12. Higher Production Quality
13. Improved Communication
14. Improved Plant Efficiency
15. Reduced Freight Cost
16. Reduction in Excess Inventory
17. Reduced Overtime
18. Improved Supply Schedules
19. Improved Calculation of Material Requirements
20. Improved Competitive Position
Bill Of Materials:
BOM: a listing of all of the raw materials, parts,
subassemblies, and assemblies, purchased and manufactured needed to
produce one unit of a product.
Product structure tree: Visual depiction of the requirements in
a bill of materials, where all components are listed by levels.
Some terms used with MRP:
Time bucket: period, usually 1 week.
Planning horizon: number of periods, then this is divided into
time fences.
Lead time offset: offsets a planned order release from a
required replenishment.
Net requirement: difference between the gross requirements and
the available inventory.
Gross requirements: anticipated future usage of (or demand for)
the item during each period.
Scheduled receipts: existing replenishment orders due in at the
beginning of the period.
Projected on hand: projected inventory status for the item at
the beginning of each period.
Net requirements: Gross Requirements minus Scheduled Receipts
minus Projected on hand.
Planned order receipt: planned receipt of replenishment orders
at the beginning of the period.
Planned order release: release of planned replenishment orders
for the item using lead-time offset.
Time Fences
A policy or guideline established to note where various
restrictions or changes in operating procedures take place. For
example, changes to the master production schedule can be
accomplished easily beyond the cumulative lead time, while changes
inside the cumulative lead time become increasingly more difficult
to a point where changes should be resisted. Time fences can be
used to define these points.
Time Zones
1-Frozen Zone
1. In forecasting, this is the period in which no changes can be
made to scheduled work orders based on changes in demand. Use of a
frozen zone provides stability in the manufacturing schedule.
2-Firm planned order (FPO):
1. A planned order that can be frozen in quantity and time. The
computer is not allowed to change it automatically; this is the
responsibility of the planner in charge of the item that is being
planned. This technique can aid planners working with MRP systems
to respond to material and capacity problems by firming up selected
planned orders. In addition, firm planned orders are the normal
method of stating the master production schedule.
3- Slushy Zone
1. Capacity and material are committed to less extent. Tradeoffs
must be met between marketing and manufacturing
4- Liquid Zone
1. Any changes can be made to the MPS
Fig (4) time zones with allowances.
Fig.(5) product structure tree without lead time
Master Production Schedule Record an Example:
In Make-to-stock environment, with fixed orders of 125 units.
There are 110 units in inventory to start. When is new order
(quantities) needed to satisfy the forecasted demand?
For a given product, the demand for 12 months, and Projected
available are listed in the table (1). The calculation will follow
these equations (lead times, lot size and time fence: fixed period,
must be known):
Projected Available = beginning inventory + MPS shipments
forecasted demand .
The MPS row shows when replenishment shipments need to arrive to
avoid a stock out (negative projected available just to show the
calculation)
And a typical Product structure diagram is shown in fig.
below:
Fig.(6) Product structure diagram for product X with lead
times.
Assume 1 week to assemble X, to calculate the lead times for
each part and then we have to set parts and the Quantities of
Product -X in the table below:
parts
quantity
Unit scale
Lead time(week)
Items Q.
Total Q.
X
500
1
500
500
A
2
each
1
500X2
1000
B
1
=
2
500X1
500
C
3
=
2
500X3
1500
D
2
=
1
500X2
1000
E
3
=
2
500X3
1500
( D)
( C) (sub)
(X: end product product )
( E) ( B- sub assemble)
5 weeks 4 3 2 1 0
Fig. (7) lead times for Product X
Time-phased Bills: lead time scheduling:
Forward scheduling: start at todays date and schedule forward to
determine the earliest date the job can be finished. If each item
takes one period to complete, the clipboards can be finished in
three periods.
Backward scheduling: start at the due date and schedule
backwards to determine when to begin work. If an order for
clipboards is due by period three, we should start production
now.
Lot sizing rules:
For purchased items or for technical reasons, there may be a
minimum or maximum order sizes .Purchased items/subassemblies may
require multiples of predetermined amounts (e.g., multiples of
50).
Rules are used to change the frequency of replenishment orders
& set the quantity of each order (balance holding &
ordering costs to reduce total costs).
Common rules used for lot sizing determination are:
Lot-for-lot ordering policy: Lot-for-Lot (L4Lor LFL) you plan
using lot-for-lot order quantity, when you want to procure the
exact lot size again. Lots as required or planned.
Fixed-size lot ordering policy (FOQ): It is useful to select a
fixed lot size for a material, if it is only delivered, for
example, in pallets of a certain quantity or in tanks of a certain
size.
Minimum order quantities
Maximum order quantities
Multiple order quantities
Economic order quantity
Periodic order quantity
Example Comparing Lot Size Rules: Three common lot sizing rules
used within MRP Systems are fixed order quantity (FOQ), lot for lot
(L4L), and period order quantity (POQ). Cost comparison is based on
Inventory holding costs ($0.10 per period) and ordering cost ($25
per order). In this example POQ is best at $133.50.
MRP System
MRP System
Week
BI
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
60
10
-40
MPS
Week
BI
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
60
10
85
35
-40
MPS
125
Week
BI
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
60
10
85
35
85
10
-65
MPS
125
125
Week
BI
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
60
10
85
35
85
10
60
110
60
10
85
35
MPS
125
125
125
125
125