1. Master Scheduling and Rough-Cut Capacity Planning
ISQA 459/559
Mellie Pullman

2. Learning Objectives
Explain the role & objectives of a master production schedule
Explain the organizational links to master production scheduling
Develop a master production schedule
Explain rough-cut capacity planning
Calculate available-to-promise quantities
Describe time fence policies

3. Role of the MPS Aggregate plan: Master production schedule:
Specifies the resources available (e.g.: regular workforce, overtime, subcontracting, allowable inventory levels & shortages)
Master production schedule:
Specifies the number & when to produce each end item (the anticipated build schedule)
Disaggregates the aggregate plan

4. Business Planning Hierarchy

5. Planning Links to MPS

6. Objectives of MPS Maintain the desired customer service level
Utilize resources efficiently
Maintain desired inventory levels

7. Developing an MPS: Assume: Make-to-stock environment
Production is in fixed quantities of 125 (MPS)
110 units in beginning inventory (BI)

8. Sample Problem We start with 110 units in Beginning Inventory
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Projected
Available
MPS
We start with 110 units in Beginning Inventory
Projected Available: How many units are available at the end of each time period?
MPS: Replenishment Shipments that need to arrive at the beginning of the time period
Projected Available =BI + MPS - Forecast

9. Step 1 Find first negative “projected available”
We start with 110 units in Beginning Inventory
Projected Available: How many units are available at the end
of each time period? (safety stock criteria could
be in place > 5)
MPS: Replenishment Shipments that need to arrive at the beginning
of the time period

10. Schedule Production

11. Repeat

12. Continue, Until Complete

13. Evaluating the MPS Customer service issues:
Does “available-to-promise” inventory satisfy customer orders?
What new orders can we take from customers and when?

14. Available to Promise
When a customer places an order, they do not expect immediate delivery (negotiable).
The product will delivered by some later date.
ATP = how many uncommitted units the company has available at a given time

15. New Calculation for Projected Available
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Customer Orders 35 25 20 15
Projected
Available
Available to Promise
MPS
Projected Available =
BI + MPS – Max (Customer Orders ; Forecast)

16. Available-to-Promise “Action Bucket”
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Customer Orders 35 25 20 15
Projected
Available 60 85
110
Available to Promise
MPS
125
“Action Bucket” = the current period
Only calculate ATP during in Action Bucket and when MPS occurs
ATP action bucket = BI +MPS-customer orders before next replenishment
– (35+25) = 50

17. Available-to-Promise “Replenishment periods”1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Customer Orders 35 25 20 15
Projected
Available 60 85
110
Available to Promise 80
125
115
MPS
ATP for replenishment periods
ATP = MPS - customer orders between current MPS and next scheduled replenishment
ATP period 3 = 125 – ( )= 80
ATP period 5 = 125 – (0 + 15)= 110

18. New Order
Suppose we get an order for 200, can we accept this for delivery in period 5?

19. Worksheet for New Order for 200
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Customer Orders 35 25 20
200 15
Projected
Available 60 85
Available to Promise 80
MPS
125
Fit in the order for 200 (can’t change MPS)

20. New Order for 200
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Customer Orders 35 25 20
200 15
Projected
Available 60 85
-40
-115
-65
-15
-90
Available to Promise 80
125
115
MPS
Negative number in Projected Available = might be a problem in the future
Negative number in Available to Promise= always a problem
Solution?

21. Split up New Order for 200 Check to see if this is OK Period 1 2 3 4 56 7 8 9 10 11 12
Forecast 50 75
Customer Orders 45 25
105 20
110 15
Projected
Available
Available to Promise
MPS
125
Check to see if this is OK

22. Can you now take 2 more orders?
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 75
Customer Orders 45 25
105 20
110 15 40
Projected
Available 60 30
-20 -5
-80
-30
Available to Promise
MPS
125
50 units to be delivered in Period 8
30 units to be delivered in Period 12

23. Time Fences

24. Frozen: no changes are possible with a certain period of time (i. e
Frozen: no changes are possible with a certain period of time (i.e. 8 weeks)
Time Fence (length of period schedule is frozen, liquid, etc.)
Demand Fence: MPS numbers do not change and focus is on orders not forecast
Planning Fence: Master Production Scheduler is planning more MPS.

25. Rough-cut capacity planning
An estimate of the plans’ feasibility
Given the demonstrated capacity of critical resources (e.g.: direct labor & machine time), have we overloaded the system?

26. Rough-Cut Capacity Planning
Determine required resources & proposed workload:
Hours/unit

27. Calculate Required Labor Hours
Compare with hours available

28. Calculate Required Machine Hours
Compare with hours available