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National Institute of Technology Calicut Department of Mechanical Engineering

MPS 1 March 2016

MASTER PRODUCTION SCHEDULE (MPS)

Anticipated build schedule for manufacturing end

products (or product options)

A statement of production, not a statement of market

demand

MPS takes into account capacity limitations, as well as

desires to utilize capacity fully

Stated in product specifications – in part numbers for

which bill of material exist

Since it is a build schedule, it must be stated in terms

used to determine component-part needs and other

requirements; not in monetary or other global unit of

measure

Specific products may be groups of items such as models

instead of end items

The exact product mix may be determined with

Final Assembly Schedule (FAS), which is not

ascertained until the latest possible moment

If the MPS is to be stated in terms of product

groups, we must create a special bill of material

(planning bill) for these groups

Task performed by a master production scheduler

Construct and update the MPS

Involves processing MPS transactions, maintaining

MPS records and reports, having a periodic review

and update cycle (rolling through time), processing


MPS 2 March 2016

and responding to exception conditions, and

measuring MPS effectiveness on a routine basis

On a day-to-day basis, marketing and production

are coordinated through the MPS in terms of Order

Promising

Order promising is the activity by which customer

order requests receive shipment dates

An effective MPS provides

Basis for making customer delivery promises

Utilising plant capacity effectively

Attaining the firm’s strategic objectives as reflected

in the production plan and

Resolving trade-off between manufacturing and

marketing

Since MPS is the basis for manufacturing budgets, the

financial budgets should be integrated with production

planning/MPS activities

When MPS is extended over a time horizon, is a better

basis for capital budgeting

Based on the production output specified in the MPS the

day-to-day cash flow can be forecasted

The MPS should be realizable and not overstated

When scheduled production exceeds capacity, usually

some or all of the following occur:

Invalid priority

Poor customer service (missed deliveries)


MPS 3 March 2016

Excess in-process inventories

High expediting costs

Lack of accountability

Production

planning

Master

Production

Schedule

Resource

planning

Front End

Material

Requirements

Planning (MRP)

Material and

Capacity Plans

Detailed

Capacity

Planning

Engine

Purchasing

Systems

Shop-floor

Control

Systems Back End

Demand

management

Rough-cut

capacity

planning

Fig. 1: Manufacturing Planning and Control System


MPS 4 March 2016

Linkage to Other Company Activities

The Demand Management Block

Represents a company’s forecasting, order entry, order

promising and physical distribution activities

Includes all activities that place demand on

manufacturing capacities

Demand may be actual and forecast customer orders,

branch warehouse requirements, interplant

requirements, international requirements and service

part requirements

The Production Plan Block

Represents role of production in the strategic business

plan of the company

Master

Scheduling

Capacity constraints

Forecasts

Production plan

Customer order

What to produce

When to produce

How much to produce

Product lead time constraints

Fig. 2: The Master Production Schedule


MPS 5 March 2016

Reflects the desired aggregate output from

manufacturing necessary to support the company

game plan

The aggregate plan constraints the MPS, since the sum

of the detailed MPS quantities must always equal the

whole dictated by the production plan

The Rough-cut Capacity Planning Block

Provides a rough evaluation of potential capacity

problems from a particular MPS

Structured Approach to Master Scheduling

Select the items and /or levels in the product structure

to be included in the master schedule

Determine the time horizon and time fences for the

master schedule

Obtain demand information for each item in the

schedule over the time horizon

Prepare tentative master schedule

Perform rough-cut capacity planning on the tentative

master schedule

Revise the tentative master schedule so it is capacity

feasible

Note on Master Schedule Stability

Freezing and time fencing concepts are used for stability

No changes (or changes only after tougher negotiations)

incorporated in certain number of recent periods of the

schedule in the case of freezing


MPS 6 March 2016

Frozen period provides a stable target for manufacturing

to hit

Time fences specify periods in which various types of

changes can be handled

Two common fences are demand fence and planning

fence

Demand fence is the shorter of the two

Inside the demand fence, the forecast is ignored in

calculating the available

Within the demand fence it is very difficult to change the

MPS

Planning fence indicates the time at which the master

production scheduler should be planning more MPS

quantities

Between the demand fence and the planning fence,

management trade-offs must be made to make changes

Outside the planning fence, the master production

scheduler can make changes


MPS 7 March 2016

DTF = Demand time fence; PTF = Planning time fence

Fig. 3: Master Schedule Time Fences

Business Environment and MPS

Encompasses the production approach used, the variety

of products produced, and the markets served by the

company

Based on the marketing environment the firms are

classified as

Make-to-stock, Make-to-order and Assemble-to-order

The MPS approach to this environment

The choice between these alternatives is largely one of

the unit (end items, specific customer orders, or some

group of end items and product options) used for the

MPS

Assemble Product Mfg. Parts Purchase Material Aggregate Plans

Cumulative lead time

Production Plan

Master schedule

Zone 1 Zone 2 Zone 3

Today DTF PTF


MPS 8 March 2016

Make-to-stock

Produces in batches, carry finished goods inventories for

most end items

MPS is the production statement of how much of and

when each end items is to be produced

E.g.:- Consumer goods and supply items

Many organisations tend to group end items into model

grouping in the MPS preparation

The end item information is delayed until the latest

possible time and the end item schedule is available in

the final assembly schedule.

All product so grouped are run together in batches to

achieve economical run for component parts

Make-to-order

Carry no finished goods inventory and builds each

customer order as needed

Very large number of possible production configurations

Small probability of anticipating a customer’s exact need

Customers expect to wait for a large portion of the entire

design and manufacturing lead time

E.g.: - Special purpose machine tools

MPS unit is typically defined as the particular end item

or set of items comprising a customer order


MPS 9 March 2016

Assemble-to-order

Limitless number of possible end item configurations, all

made from combination of basic components and

subassemblies

Customer delivery time is often shorter than total

manufacturing lead time

Large number of end item possibilities makes forecasting

exact end item configurations extremely difficult and

stocking end items very risky

Tries to maintain flexibility by starting basic components

and subassemblies into production and not starting final

assembly until a customer order is received

E.g.: - Dell computers

The MPS unit is stated in planning bills of material

The MPS unit (Planning bill) has its components as a set

of common parts and options

Note

Choice of MPS unit is somewhat open to definition by

the firm

Some firms may produce end items that are held in

inventory, yet still use assemble-to-order approaches

Some firms use more than one of these approaches at the

same time

Structural Features

Identifying the general product structure of an

organisation and locating the point of greatest


MPS 10 March 2016

commonality – the narrowest part of the product

structure helps organisations to identify the MPS unit or

level

Fig. 4: General Product Structures

Table 1: Master Schedule Levels

Environment Forecast Master schedule level Classification

Make-to-stock End items End items Single-level

master schedule

Make-to-order

DLT PLT

None required End item from actual

orders

Single-level

master schedule

Make-to-order

DLT < PLT

Families with

planning bill

Family planning bill and percentage of end

items

Two-level

master schedule

Assemble-to-

order

Generic end item with

planning bill

Generic end item and

percentage of options

Two-level

master schedule

DLT = Delivery lead time; PLT = Product lead time

Finished

product

Limited number of

standard Items

assembled from

components

Finished

product

Many items made from

common subassemblies

Finished

product

Many items made from

limited number of

materials


MPS 11 March 2016

Number of possible models = (2)(4)(3)(5) = 120

combinations

Number of product modules = 2 + 4 + 3 + 5 = 14

Options

Fig. 5: An Example of Planning Bill of Material

One of 3

Transmissions

Vehicles

One of 2

Engines One of 4

Interiors

One of 5

Bodies

Engine A

0.60

Engine B

0.40

Transmissions H

0.25

Transmissions I

0.15

PLANNING

BILL

Interior C

0.40

Interior D

0.30

Interior E

0.20

Interior F

0.10

Transmissions G

0.60

Body J

0.30

Body K

0.30

Body L

0.20

Body M

0.10

Body N

0.10


MPS 12 March 2016

Master Production Scheduling Technique

MPS record is a time-phased record to show

relationships between production output, sales forecast,

and expected inventory balance

Week Number

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

Forecast 10 10 10 10 10 10 10 10 10 10 10 10

Available 5 5 5 5 5 5 5 5 5 5 5 5

MPS - 10 10 10 10 10 10 10 10 10 10 10

On hand 15

Fig. 6: A time-phased MPS record

The above record (Fig. 6) is a highly simplified example

of master production schedule involving an item with a

beginning inventory of 15 units, sales forecast of 10 units

per week, and MPS of 10 units per week as well

The MPS row states the timing for completion of units

available to meet demand

The details for starting production of the various

components and assembly of the product are taken care

of by the MRP system

The “available” row represents the expected inventory

position at the end of each week

Any negative values in the available row represents

expected back orders

An MPS is allocated to a period where available

inventory quantity is equal to zero or less if MPS is not

allocated


MPS 13 March 2016

Reason for carrying positive projected inventory balance

Forecasts involve some degree of error, and the MPS

is a plan for production that may not be exactly

achieved

Projected inventory balance provides a tolerance for

errors that buffers production from sales variations

Various MPS approaches for seasonal products

The forecast for the next 12 weeks is given in Fig. 7 which

shows an average demand of 10 units and the MPS planner

plans 10 units as MPS in every week as the planner follows

a level strategy. Currently the planner has 20 units as on-

hand inventory. (This on-hand inventory, the planner

maintains to buffer against demand variability, and

production uncertainty which will be reflected as MPS

variability.) The MPS record in that case is as shown in

Fig. 7. Week Number

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 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

Fig. 7: Level Strategy

For the same situation given above (for the level strategy),

the MPS record, when chase strategy is followed, is given

in Fig. 8. In this strategy also the planner uses the on-hand

inventory to buffer against demand and MPS uncertainty.


MPS 14 March 2016

Week Number

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 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

Fig. 8: Chase strategy

There are many alternative MPS plans possible between

these two extremes.

Lot sizing in MPS

Whenever an MPS is planned, the lot size is 30 units. The

record given in Fig. 9 shows that the MPS planner plans an

MPS quantity, when available quantity is zero or negative.

Week Number

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 30

On hand 20

Fig. 9: MPS with Lot sizing

Manufacturing in batches produces inventories that last

between production runs. This inventory is called cycle

stock.

Safety Stock in MPS

Revise the MPS in the Fig. 9 considering a safety stock

of 5 units. Assume that the on-hand contains the safety

stock. Fig. 10 shows the revised MPS record.


MPS 15 March 2016

Week Number

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 35 30 25 20 35 20 35 20 35 20

MPS 30 30 30 30

On hand 20 Safety stock = 5

Fig. 10: Modified MPS record considering safety stock

Rolling Through Time

This helps to updates the record to reflects the actual

conditions

It is necessary not only to construct the MPS but also to

process actual transactions and modify the MPS

Consider the MPS record given in Fig. 9.

The first week is over and the following changes

occurred: The actual sales were 10 units in the first

week instead of 5 units and a different forecast is

available for the next 12 weeks.

The new forecast at the end of the first week is for 10

units per week for the next 5 weeks and 15 units per

week for the following 7 weeks (7 through 13).

The new 12-week forecast incorporates 25 more units

than the original 12-week forecasts in the first five

weeks.

The implication of this (without revising the MPS) is

available in Fig. 11.


MPS 16 March 2016

Week Number

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

Fig. 11: Using the revised forecast after one week

The MPS record shown in Fig. 11 indicates that the plan

has several periods with shortages.

The planner revises the plan considering allocation of MPS

quantity in a period when available becomes zero or

negative is given in Fig. 12.

Week Number

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

Fig. 12: MPS revised to accommodate revised forecast after

one week

Identify the problems associated with the revised MPS

given in Fig. 12.

As per the plan in Fig. 9, the production department has to

give 30 units in week 4 of the production calendar, but the

revised plan asks this quantity by now (week 2 of

production calendar). This is impossible.


MPS 17 March 2016

Production department has to give 30 units in week 5 as per

the plan in Fig. 12 which as per the plan in Fig. 9 is to

provide only in week 8. This is also a difficult task for the

production department.

Assume that the MPS planner was preparing the plan

with safety stock (of 15 units) regularly and as a result

the on-hand inventory for the first period is 35 units. The

plan in Fig. 9 modified on the basis of on-hand 35 units

and safety stock 15 is as shown in Fig. 13.

Week Number

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 30 25 20 45 40 35 20 35 20 35 20 35

MPS 30 30 30 30


Fig. 13: MPS plan in Fig. 9 modified considering on-hand = 35

and safety stock = 15

When the plan is as shown in Fig. 13, the rolling through

time resulted in the plan as shown in Fig. 14. In this plan

no changes is made in MPS.

Week Number

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 15 5 25 15 5 -10 5 -10 5 -10 5 -10

MPS 30 30 30 30


Fig. 14: Modified MPS plan in Fig.13 after rolling through

time

Fig. 14 shows that the severity of the problem due to

change in current demand and forecast are less compared to

the plan in Fig.11.


MPS 18 March 2016

Order Promising

For many products, customers do not expect immediate

delivery, but place orders for future delivery

The delivery date (promise date) is negotiated through a

cycle of order promising, where the customer either asks

when the order can be shipped or specifies a desired

shipment date

If the company has a backlog of orders for future

shipments, the order promising task is to determine when

the shipment can be made

The delivery date promise procedure is explained with an

MPS record of an item shown below

Week Number

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 30

On hand 20

Fig. 15: A typical MPS plan for ATP incorporation

To decide the promise date the quantity available for

promise is to be known

Available-to-promise (ATP) is the term used to

represent this quantity

Conventions used in the MPS record with order promise

Forecast row shows the forecasting when items will be

shipped


MPS 19 March 2016

There is a row labeled “Orders” represents the

company’s backlog of orders at the start of first week

The frequently used convention in the case of available

row is to use the greater of forecast or booked orders in

any period for projecting the available inventory balance

This is consistent with the concept that actual orders,

“consume” the forecast

That is, we start out with an estimate (the forecast), and

actual orders come into consume (either partially, fully,

or over the estimate)

Calculation procedure associated with available row is

Current period available = Previous period available +

MPS – (Greater of forecast or orders)

An ATP value is calculated for each period in which

there is an MPS quantity and also for the first period

To calculate the available to promise only the actual

orders and scheduled production are considered

ATP calculation procedure

Fist period ATP = On-hand + any first-period MPS -

(all orders until the next MPS)

Later period ATP = MPS in that period - (all orders

in that and subsequent periods until the next MPS)

Both of these rules, however, have to be modified to

reflect subsequent periods ATP deficiencies


MPS 20 March 2016

Week Number

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

Orders 5 3 2

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

ATP 10 30 30 30 30

MPS 30 30 30 30

On hand 20

Fig. 16: MPS record with ATP

Suppose an order for 35 units was booked for week 10 in

the current period for the above item

The ATP row changes as follows

Week Number

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

Orders 5 3 2 35

Available 15 10 5 30 25 20 5 20 5 0 -15 0

ATP 10 30 25 0 30

MPS 30 30 30 30

On hand 20

Fig. 17: MPS Record with ATP showing ATP calculation

under subsequent period ATP deficiency

Note that the later customer orders are covered by the

later MPS quantities

The 35 units order for week 10 could have been covered

by 10 units in week 1 plus 25 units from the MPS of

week 4.


MPS 21 March 2016

This would have left no units for promising from week 1

until week 3, greatly reducing promise flexibility

The convention is to preserve early promise flexibility by

allocating units to actual orders as late as possible

The available row provides the master production

scheduler with a projection of the item availability

throughout the planning horizon

This is important information for managing the master

production schedule

A negative available quantity at the end of the planning

horizon is a signal for more MPS

During the planning horizon there is typically some

length of time in which changes are to be made only if

absolutely essential, to provide stability for planning and

execution

At the end of this period, master production schedulers

have maximum flexibility to create additional MPS

quantity

Accurate order promising allows the company to operate

with reduced inventory levels

That is, order promising allows the actual shipments to

be closer to the MPS

Companies in effect buffer uncertainties in demand by

their delivery date promises

Firms manage the delivery dates rather than carry safety

stock to absorb uneven customer order pattern


MPS 22 March 2016

Exercise Problem

1. Problem

Neptune Manufacturing Company’s production manager

wants a master production schedule covering next year’s

business. The company produces a complete line of small

fishing boats for both saltwater and freshwater use and

manufactures most of the components part used in

assembling the products. The firm uses MRP to coordinate

production schedule of the component part manufacturing

and assembly operations. The production manager has just

received the following sales forecast for next year from the

marketing division:

Product

Lines

Sales Forecast (standard boats for each series)

1st Quarter 2

nd Quarter 3

rd Quarter 4

th Quarter

FunRay

series

8,000 9,000 6,000 6,000

SunRay

series

4,000 5,000 2,000 2,000

StingRay

Series

9,000 10,000 6,000 7,000

Total 21,000 24,000 14,000 15,000

The sales forecast is stated in terms of “standard boats”,

reflecting total sales volume for each of the firm’s three

major product lines.

Another item of information supplied by marketing

department is the target ending inventory position for each

product line. The marketing department would like the

production manager to plan on having the following


MPS 23 March 2016

number of standard boats on hand at the end of each quarter

of next year:

Product Line Quarterly Target

Ending Inventory

(In Standard Boats)

FunRay series 3,000 boats

SunRay series 1,000 boats

StingRay series 3,000 boats

The inventory position for each product is:

Product Line Current Inventory level

(In Standard Boats)

FunRay series 15,000 boats

SunRay series 3,000 boats

StingRay series 5,000 boats

The master production schedule specify the number of

boats (in standard units) to be produced for each product

line in each quarter of next year on the firm’s single

assembly line. The assembly line can produce up to 15,000

standard boats per quarter (250 boats per day during the 60

days in a quarter).

Two additional factors are taken into account by the

production manager in preparing the master production

schedule: the assembly line changeover cost and the

inventory carrying cost for the finished goods inventory.

Each assembly line changeover costs $5,000 reflecting

material handling costs of changing the stocking of

component part on the line, adjusting the layout, and so on.

After some discussion with the company comptroller, the

production manager concluded that the firm’s inventory


MPS 24 March 2016

carrying cost is 10 percent of standard boats cost per year.

The item value for each of the product line standard units

is:

Product Line Standard Boat Cost

FunRay series $ 100

SunRay series 150

StingRay series 200

The master production scheduler has calculated the

production lot sizes as 5,000, 3,000 and 4,000 units,

respectively.

a) Develop a master production schedule for next year, by

quarter, for Neptune’s fishing boat line. Identify any

problems.

b) Verify the lot size calculations using the EOQ formula.

Solution for part (a) of the problem

When the MPS is prepared here, the constraints to be

satisfied are demand, capacity, end of the period inventory

and lot sizing. Prepare a tentative MPS satisfying demand

and lot sizing constraints. If the planned production is more

than the lot size, the production batch is determined as the

planned quantity for meeting the requirements.

FunRay Series

Period 1 2 3 4

Forecast 8000 9000 6000 6000

Available 7000 3000 2000 1000

MPS 5000 5000 5000

On-hand 15,000


MPS 25 March 2016

SunRay Series Period 1 2 3 4

Forecast 4000 5000 2000 2000

Available 2000 -- 1000 2000

MPS 3000 3000 3000 3000

On-hand 3,000

StingRay Series Period 1 2 3 4

Forecast 9000 10,000 6000 7000

Available -- -- -- --

MPS 4000 10,000 6000 7000

On-hand 5000

Scheduled production for assembly line FunRay series -- 5000 5000 5000

SunRay series 3000 3000 3000 3000

StingRay series 4000 10,000 6000 7000

Total 7000 18,000 14,000 15,000

MPS quantity in 2nd quarter is higher than the capacity.

Also, the required quarterly ending inventory is not

achieved using the tentative MPS.

Now, considering the excess capacity available in certain

period, try to satisfy the capacity constraint. The capacity

and demand constraints should be satisfied, and the lot

sizing and end of the period inventory constraints should be

satisfied to the maximum possible extend.


MPS 26 March 2016

Modified MPS

For StingRay series, modify the planned production as

11000 units in first period and for SunRay series, modify

the first period MPS quantity as 4000 units.

FunRay Series

Period 1 2 3 4

Forecast 8000 9000 6000 6000

Available 7000 3000 3000 3000

MPS 5000 6000 6000

On-hand = 15,000

Lot Size = 5000

Ending inventory = 3000

SunRay Series Period 1 2 3 4

Forecast 4000 5000 2000 2000

Available 3000 1000 2000 1000

MPS 4000 3000 3000 1000

On-hand = 3,000

Lot Size = 3000


StingRay Series Period 1 2 3 4

Forecast 9000 10,000 6000 7000

Available 7000 4000 3000 3000

MPS 11,000 7,000 5000 7000

On-hand = 5000

Lot Size = 4000



MPS 27 March 2016

MPS quantities for assembly line FunRay series 5000 6000 6000

SunRay series 4000 3000 3000 1000

StingRay series 11,000 7,000 5000 7000

Total 15,000 15,000 14,000 14,000

Above MPSs are satisfying production capacity constraints

and end of the period inventory constraints. The lot sizing

constraints are satisfied under the modified rule (If MPS

quantity is greater than suggested lot size, then the lot size

is equal to MPS quantity.). But this constraint is not

satisfied for period 4 of SunRay series. The constraints -

the end of the period inventory given is considered as the

minimum requirement.

Think of some modification for SunRay series considering

excess capacity available in period 3 and without any MPS

quantity in period 4.

2. Problem

(a) Complete the following MPS time phased record of the

product. Week

1 2 3 4 5 6 7 8

Forecast 20 20 20 30 30 30 30 30

Orders 25 15 12

Available

Available to promise

MPS

On hand = 20, MPS lot size = 50.

(b) The following events occurred during week 1:

Actual demand during week 1 was 30 units.


MPS 28 March 2016

Marketing forecasted that 40 units would be needed

for week 9.

An order for 10 in week 2 was accepted.



The MPS in week 1 was produced as planned.

Update the record after rolling through time. Assume that

the demand time fence (DTF) is 4 weeks. Management is

not interested to make any change in quantity and period of

MPSs in DTF. Do you have any difficulty after rolling

through week 1?

Solution

(a) Week

1 2 3 4 5 6 7 8

Forecast 20 20 20 30 30 30 30 30

Orders 25 15 12

Available 45 25 5 25 45 15 35 5

Available to promise 18 50 50 50

MPS 50 50 50 50


(b) When the record is processed at the end of week 1 and

no change in MPS is made in DTF, the MPS record is as

follows:


MPS 29 March 2016

Week

2 3 4 5 6 7 8 9

Forecast 20 20 30 30 30 30 30 40

Orders 25 12 20 60

Available 15*

3*

33*

83*

23 43 13 23

Available to promise 3 20 0**

50 50

MPS 50 50 50 50


* Only orders are considered for available to calculate

** If you use the ATP (available to promise) calculation

method, the ATP quantity is negative. But the ATP

quantity available in the immediate previous period is used

to meet the actual order of succeeding period and hence the

ATP for the period 5 is made zero. Note that the later

customer orders are covered by the later MPS quantities.

Incorporation of MPS execution related information in

the MPS record

Consider the record in the part (a) of problem 2. Assume

that the lead time for this item is two weeks when its

immediate components (i.e., first level item in its bill of

material) are available. The record can be modified to

include the planned order release and scheduled receipt.

The MPS = 50 units in week 1 of the record shows that 50

units will be received in the beginning of week 1 to the

finished goods inventory. That is, a production order might

have been released in an early week and based on this

production order, production activities might be going-on


MPS 30 March 2016

in the production shops. The record will be more

informative if the order receipt and order releases are

shown in it. The record below shows these details in an

MPS record.

Week

1 2 3 4 5 6 7 8

Forecast 20 20 20 30 30 30 30 30

Orders 25 15 12

Available 45 25 5 25 45 15 35 5

Available to promise 18 50 50 50

MPS 50 50 50 50

Scheduled receipt 50

Planned order release 50 50 50

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