Master Production Scheduling Supplement F To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

MPS Process To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Authorized production plan MPS Process Authorized production plan Figure F.1 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Authorized production plan Prospective master production schedule MPS Process Authorized production plan Prospective master production schedule Figure F.1 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

MPS Process Are resources available? Authorized production plan Prospective master production schedule Figure F.1 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

MPS Process No Are resources available? Authorized production plan Prospective master production schedule Figure F.1 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

MPS Process No Yes Are resources available? Authorized production plan Prospective master production schedule Authorized master production schedule Figure F.1 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

MPS Process No Yes Are resources available? Authorized production plan Prospective master production schedule Material requirements planning Authorized master production schedule Figure F.1 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Developing an MPS To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Developing an MPS MPS quantity (0 for week 1) Inventory = + – = 55 chairs currently in stock 38 chairs already promised for delivery in week 1 17 chairs To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Developing an MPS 1 2 30 30 38 27 MPS quantity (0 for week 1) Item: Ladder-back chair MPS start MPS quantity Projected on-hand Inventory Customer orders (booked) Forecast Quantity On Hand: April 55 1 2 30 30 38 27 MPS quantity (0 for week 1) Inventory = + – = 55 chairs currently in stock 38 chairs already promised for delivery in week 1 17 chairs Figure F.2 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Developing an MPS 1 2 30 30 38 27 17 MPS quantity (0 for week 1) Explanation: Forecast is less than booked orders in week 1; projected on-hand inventory balance = 55 + 0 – 38 = 17. Item: Ladder-back chair MPS start MPS quantity Projected on-hand Inventory Customer orders (booked) Forecast Quantity On Hand: April 55 1 2 30 30 38 27 17 MPS quantity (0 for week 1) Inventory = + – = 55 chairs currently in stock 38 chairs already promised for delivery in week 1 17 chairs Figure F.2 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Developing an MPS Item: Ladder-back chair MPS start MPS quantity Projected on-hand Inventory Customer orders (booked) Forecast Quantity On Hand: April 55 1 2 30 30 38 27 17 -13 0 0 MPS quantity (0 for week 1) Inventory = + – = 55 chairs currently in stock 38 chairs already promised for delivery in week 1 17 chairs Figure F.2 Explanation: Forecast is less than booked orders in week 1; projected on-hand inventory balance = 55 + 0 – 38 = 17. Explanation: Forecast exceeds booked orders in week 2; projected on-hand inventory balance = 17 + 0 – 30 = –13. The shortage signals a need to schedule an MPS quantity for completion in week 2. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 MPS quantity MPS start Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 MPS quantity 150 MPS start Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 Explanation: On-hand inventory balance = 17 + 150 – 30 = 137. The MPS quantity is needed to avoid a shortage of 30 – 17 = 13 chairs in week 2. MPS quantity 150 MPS start Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 Explanation: The time needed to assemble 150 chairs is one week. The assembly department must start assembling chairs in week 1 to have them ready by week 2. MPS quantity 150 MPS start 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 MPS quantity 150 MPS start 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 MPS quantity 150 MPS start 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 MPS quantity 150 MPS start 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 MPS quantity 150 MPS start 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 122 MPS quantity 150 150 MPS start 150 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Master Production Schedule Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 122 87 MPS quantity 150 150 MPS start 150 150 Figure F.3 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Available to Promise To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Available to Promise Item: Ladder-back chair April May 55 Figure F.4 Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 122 87 MPS quantity 150 150 MPS start 150 150 Available-to-promise (ATP) inventory Figure F.4 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Available to Promise Item: Ladder-back chair April May 55 Explanation: Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 122 87 Explanation: The total of customer orders booked until the next MPS receipt is 38 units. The ATP = 55 (on-hand) + 0 (MPS quantity) – 38 = 17. MPS quantity 150 150 MPS start 150 150 Available-to-promise (ATP) inventory 17 Figure F.4 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Available to Promise Item: Ladder-back chair April May 55 Explanation: Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 122 87 MPS quantity 150 Explanation: The total of customer orders booked until the next MPS receipt is 27 + 24 + 8 = 59 units. The ATP = 150 (MPS quantity) – 59 = 91 units. 150 MPS start 150 150 Available-to-promise (ATP) inventory 17 91 Figure F.4 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Available to Promise Item: Ladder-back chair April May 55 Figure F.4 Order Policy: 150 units Lead Time: 1 week Item: Ladder-back chair April May Quantity on Hand: 55 1 2 3 4 5 6 7 8 Forecast 30 30 30 30 35 35 35 35 Customer orders (booked) 38 27 24 8 Projected on-hand inventory 17 137 107 77 42 7 122 87 MPS quantity 150 150 MPS start 150 150 Available-to-promise (ATP) inventory 17 91 150 Figure F.4 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Freezing the MPS To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Freezing the MPS Week 1 2 3 4 5 6 7 8 9 10 0 150 0 0 0 0 150 0 0 0 MPS quantity Figure F.5 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Freezing the MPS Week 1 2 3 4 5 6 7 8 9 10 0 150 0 0 0 0 150 0 0 0 MPS quantity Demand time fence Figure F.5 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Freezing the MPS Week 1 2 3 4 5 6 7 8 9 10 0 150 0 0 0 0 150 0 0 0 MPS quantity Demand time fence Planning time fence Figure F.5 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Solved Problem To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Solved Problem Item: A Week 5 Figure F.6 Order Policy: 50 units Lead Time: 1 week Forecast Customer orders (booked) Projected on-hand inventory MPS quantity MPS start Week Quantity on Hand: 5 Available-to-promise (ATP) inventory 1 30 10 2 20 40 3 4 8 6 7 25 50 Figure F.6 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Solved Problem Figure F.7 To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.