1. Rough-Cut Capacity Planning in SCM (Review) EIN 5346 Logistics Engineering Fall, 2016

2. Rough-Cut Capacity Planning in SCM Theories & Concepts

3. APICS-Standard Planning Framework
APICS - American Production and Inventory Control Society

4. Rough-cut Capacity Planning
Main goal in rough-cut capacity planning is to identify where overloading or under-loading of production capacity occurs and revise the MPS as required.
Overloading means that too much production of products has been planned in the facility and insufficient capacity exists to produce planned quantities of products required in MPS.
Under-loading means that not enough production of products has been planned to fully load the facility.

5. Rough-Cut Capacity Planning in APO-SNP

6. Order Life Cycle for Make-to-Stock
DEMANDS
Original
Revised
Forecast 200 includes the sales order 100.
SUPPLIES

7. Order Life Cycle for Make-to-Order

8. Forecast Consumption Mode and Horizon
(Backword consumption of 4 days and a forward consumption of 3 days)

9. Forecast Consumption Mode and Horizon
(Backword consumption of 4 days and a forward consumption of 3 days)

10. Forecast Consumption Mode and Horizon
Order 70
(Backword consumption of 4 days and a forward consumption of 3 days)

11. Forecast Consumption Mode and Horizon
Order 70
(Backword consumption of 4 days and a forward consumption of 3 days)

12. Transactional Data for Transferring
Starting from a demand plan, SNP checks the resource capacities and delivers a medium/long-term plan for the estimated sales volumes.
The plan includes 1) quantities to be transported between locations (e.g., DC-customer, or plant-DC) and 2) quantities to be produced (and procured), taking available capacity into consideration.
SNP creates planned orders, purchase requisitions, and stock transfers that can be transferred directly to the connected OLTP systems.
OLTP – Online transaction processing

13. Capacity Levelling
Capacity leveling supports the following resource categories:
Production resources in APO (Work centers in ERP)
Transportation resources

14. Capacity Levelling Profile
The main settings in the capacity leveling profile are scheduling direction, prioritization, and method.
Scheduling Direction controls whether Forward, Backward or Combined scheduling is used.
Prioritization for the heuristic run defines how leveling determines the sequence of orders. The two possible choices for prioritization (to be sorted by ascending or descending order) are
by order size or
by product priority.
Method choices are
Heuristic,
Optimizer or
Badi (Business Aided-in).

15. Capacity Levelling Profile

16. Heuristics-based Capacity Levelling
Heuristic-based capacity leveling compares, period by period,
If resource is found overloaded, the system first selects all the activities or orders that cause the overload in this period.
It sorts these orders according to the priority one by one until the required maximum resource utilization is reached.

17. Time-based Capacity Levelling

18. Capacity Levelling

19. SNP Heuristic as Location, Network, and Multi-Level Heuristic

20. Operation Research (OR)
Operation research refers to the application of quantitative methods and techniques to business problems in order to best utilize a company’s resources.
OR is used by many leading companies to optimize their limited resources in order to maximize their profits or minimize their costs.
Linear programming (LP) is one of the most important tools of operation research.

21. Linear Programming (LP)

22. Linear Programming (LP)
Five common types of LP problems:
Product mixed
Ingredient mix
Transportation
Production plan
Assignment

23. Five common types of LP problems

24. Five common types of LP problems

25. Steps in Formulating LP Problems
Define the objective
Define the decision variables
Write the mathematical function for the objective (objective function)
Write a one- or two-word description of each constraints
Write the right-hand side (RHS) of each constraint, including the unit of measure.
Write<=, =, or >= for each equation
Write all the decision variables on the left-hand side of each constraints
Write the coefficient for each decision variable in each constraint.

26. Formulating LP

27. Formulating LP

28. Formulation LP

29. Formulation of Problem

30. Objective and Constraints

31. Steps in Graphical Solution Method

32. Graphical Solution

33. Graphical Solution

34. Graphical Solution

35. Graphical Solution