aggregate planning and mps - final 2009 (2)

7/30/2019 Aggregate Planning and MPS - Final 2009 (2)

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Aggregate Planningand

MPS


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13-2

Production Planning Horizons

Master Production Scheduling

Production Planning and Control Systems

Pond Draining

Systems

Aggregate Planning

Push

Systems

Pull

Systems

Focusing on

Bottlenecks

Long-Range Capacity Planning Long-Range(years)

Medium-Range

(6-18 months)Short-Range

(weeks)Very-Short-Range

(hours - days)


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Planning Horizon

Aggregate Planning: Intermediate-rangecapacity planning, usually covering 2 to 12

months.

Short

range

Intermediate

range

Long range

Now 2 months 1 Year


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Short-range plans (Detailed plans) Machine loading

Job assignments

Intermediate plans (General levels) Employment

Output

Long-range plans Long term capacity

Location / layout

Overview of Planning Levels


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13-5

Aggregate Planning

Begin with forecast of aggregate demand Forecast intermediate range

General plan to meet demand by setting

Output levels/Employment Finished goods inventory level

Production plan is the output of aggregate

planning Update plan periodically rolling planning

horizon always covers the next 12 18 months


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Resources Workforce

Facilities

Demand forecast Policies

Subcontracting

Overtime Inventory levels

Back orders

Costs Inventory carrying

Back orders

Hiring/firing Overtime

Inventory changes

Subcontracting

Aggregate Planning Inputs


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Total cost of a plan

Projected levels of inventory

Inventory

Output

Employment

Subcontracting

Backordering

Aggregate Planning Outputs


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Aggregate Planning Strategies

Proactive

Alter demand to match capacity

ReactiveAlter capacity to match demand

Mixed

Some of each


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Pricing

Promotion

Back orders

New demand

Demand Options


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Hire and layoff workers

Overtime/slack time

Part-time workers

Inventories

Subcontracting

Capacity Options


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Aggregate Planning Strategies

Maintain a level workforce

Maintain a steady output rate

Match demand period by period

Use a combination of decision

variables


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Basic Strategies

Level capacity strategy:

Maintaining a steady rate of regular-timeoutput while meeting variations in

demand by a combination of options.

Chase demand strategy:

Matching capacity to demand; theplanned output for a period is set at theexpected demand for that period.


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1.Determine demand for each period

2.Determine capacities for each period

3. Identify policies that are pertinent

4.Determine units costs

5.Develop alternative plans and costs

6.Select the best plan that satisfies objectives.

Otherwise return to step 5.

Techniques for Aggregate Planning


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Mathematical Techniques

Linear programming: Methods for obtainingoptimal solutions to problems involvingallocation of scarce resources in terms of cost

minimization.

Simulation models: Computerized models that

can be tested under different scenarios toproblems.


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Services occur when they are rendered

Demand for service can be difficult to

predict

Capacity availability can be difficult to

predict

Labor flexibility can be an advantage inservices

Aggregate Planning in Services


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Aggregate Plan to Master Schedule

Aggregate

Planning

Disaggregation

Master

Schedule


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Master Schedule: The result of

disaggregating an aggregate

plan; shows quantity and timingof specific end items for a

scheduled horizon.

Disaggregating the Aggregate Plan


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Master Scheduling

Master schedule

Determines quantities needed to meet

demand

Interfaces with Marketing

Capacity planning

Production planning

Distribution planning


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Master Scheduler

Evaluates impact of new orders

Provides delivery dates for orders

Deals with problems

Production delays

Revising master schedule

Insufficient capacity


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Master Scheduling Process

Master

Scheduling

Beginning inventory

Forecast

Customer orders

Inputs Outputs

Projected inventory

Master production schedule

Uncommitted inventory


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Time Fences

Time Fences points in time

that separate phases of amaster schedule planning

horizon.


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The rules for scheduling

No Change

+/- 5%

Change

+/- 10%

Change

+/- 20%

Change

FrozenFirm

FullOpen

1-2weeks

2-4

weeks

4-6

weeks6+

weeks

Time Fences


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Time Fences

The rules for scheduling:

Do not change orders in the frozen zone

Do not exceed the agreed upon percentagechanges when modifying orders in the other

zones

Do not exceed the capacity of the systemwhen promising orders.


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Developing an MPS

Using input information Customer orders (end items quantity, due

dates)

Forecasts (end items quantity, due dates) Inventory status (balances, planned receipts)

Production capacity (output rates, planned

downtime)

Schedulers place orders in the earliest available

open slot of the MPS

. . . more


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Developing an MPS

Schedulers must: estimate the total demand for products from all

sources

assign orders to production slots

make delivery promises to customers, and

make the detailed calculations for the MPS

As orders are slotted in the MPS, the effects on theproduction work centers are checked

Rough cut planning - identify underloading or

overloading of capacity


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Types of

Production-Planningand Control Systems


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Types of Production-Planning

and Control Systems

Pond-Draining Systems - Emphasis on holdinginventories (reservoirs) of materials to supportproduction.

Push Systems - Use information aboutcustomers, suppliers, and production to managematerial flows.

Pull Systems - Look only at the next stage of

production and determine what is needed there,and produce only that

Focusing on Bottlenecks


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Wrap-Up: World-Class Practice

Push systems dominate and can be

applied to almost any type of production

Pull systems are growing in use. Mostoften applied in repetitive manufacturing

Few companies focusing on bottlenecks to

plan and control production.

aggregate planning and mps - final 2009 (2)

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