material management class note # 2 mps practices – available-to-promise ( atp )
DESCRIPTION
Material Management Class Note # 2 MPS Practices – Available-to-Promise ( ATP ). Prof. Yuan-Shyi Peter Chiu Feb. 2012. 1. ~ MPS Practices ~. Order Promising : The process of making order delivery commitments. The delivery date is negotiated - PowerPoint PPT PresentationTRANSCRIPT
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Material ManagementClass Note #2
MPS Practices – MPS Practices – Available-to-PromiseAvailable-to-Promise ( ATP )( ATP )
Prof. Yuan-Shyi Peter Chiu Feb. 2012
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~ MPS Practices ~ Order Promising : The process of making order delivery commitments
The delivery date is negotiated
Whether we can promise delivery on certain date or not ?!
Extended MPS Record
Forecast
Customer orders (actual received)
Projected Available
Available–To–Promise (ATP)
MPS (scheduled shipments)
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Projected Available = (Beginning inventory) + (MPS shipment) — max. [ (the period’s forecast),(actual customer orders) ]
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected available
Available – to – promise
MPS (shipments Received) 125 125 125 125 125
＊ the beginning inventory is 110
Then using formula, we obtain projected available as shown
in red
eg.
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eg. (with projected available)
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected available 110 60 10 85 35 85 10 60 110 60 10 85 35
ATP
MPS (shipments) 125 0 125 0 125 125 0 0 125
Projected Available
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ATP (Available–To–Promise) ： The uncommitted portion of a company’s inventory and planned production, maintained in the MPS to support order promising
ATP action bucket : for current period
ATP future : for future replenishment periods
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ATP action bucket
= (beginning inventory ) + (MPS shipment) — (Customer orders before next replenishment)
ATP future = (MPS shipment) — (Customer orders between current
MPS shipment and next scheduled replenishment)
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected available 110 60 10 85 35 85 10 60 110 60 10 85 35
ATP 50 80 110 125 115 115
MPS (shipments) 125 125 125 125 125
＊ ATP action bucket = 110 + 0 – (35 + 25) = 50＊ ATP3 = 125 – (25 + 20) = 80
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＊ ATP5 = 125 – (15) = 110
＊ ATP7 = 125 – 0 = 125
＊ ATP8 = 125 – (10) = 115
＊ ATP11 = 125 – (10) = 115
The ATP records show how much inventory is available
to satisfy customer demand, to support order promising
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＊ update customer order in period 5 to 200, below ：Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
200
Customer orders 35 25 25 20 0 15 0 0 10 0 0 10
Projected available 110 60 10 85 35 85 10 60 110 60 10 85 35
-40 -115 -65 -15 -65 -115 -40 -90
ATP 50 80 110 125 115 115
-90
MPS (shipments) 125 125 125 125 125
＊ update projected available & ATP PA 5 = (35 + 125) – max {75, 200 } = – 40
ATP 5 = 125 – (200 + 15 ) = – 90
& PA 6 = (– 40) – max {75,15} = – 115 & so on.
Using ATP practices
Example ＃ 1 ： Can you promise a customer’s purchaseCan you promise a customer’s purchase
of 200 units delivery set in period 5 of 200 units delivery set in period 5 ？？
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TWO rules to remember here
◇ rule #1 :
A negative number in the projected available row is sometimes a problem
◇ rule #2 :
A negative number in the ATP row is always a problem
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Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
45 105 110
Customer orders 35 25 25 20 200 15 0 0 10 0 0 10
Projected available 110 60 10 85 35 -5 - 80 -30 20 -30 - 80 -5 -55
30 -20
ATP 50 80 -90 125 115 115
40 0 0
MPS (shipments) 125 125 125 125 125 ＊ Use uncommitted units in period 3, ATP3 = 80 – 80 = 0 and in period 1, ATP1 = 50 – 10 = 40
i.e. mark 10 boxes in period 1 & 80 boxes in period 3 & 110 boxes in period 5 with the same client’s name
ExampleExample ＃＃ 11 ： Can you promise a customer’s purchaseCan you promise a customer’s purchase of 200 units delivery set in period 5 of 200 units delivery set in period 5 ？？
∴ ∴ we we cancan promise a customer’s purchase of 200 units, promise a customer’s purchase of 200 units, delivering in period 5delivering in period 5
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Using ATP practices
ExampleExample ＃＃ 2 2 ：： Can you promise Can you promise next ordernext order for 50 units for 50 units for period 4 delivery ?for period 4 delivery ?
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 45 25 105 20 110 15 0 0 10 0 0 10
Projected available 110 60 10 30 -20 -5 -80 -30 20 -30 -80 -5 -55
ATP 40 0 0 125 115 115
MPS (shipments) 125 125 125 125 125
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Example ＃ 2 ： Can you promise next order for 50 units for period 4 delivery ?
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
70
Customer orders 45 25 105 20 110 15 0 0 10 0 0 10
Projected available 110 60 10 30 -20 -5 -80 -30 20 -30 -80 -5 -55
-40 -25 -100 -50 0 -50 -100 -25 -75
ATP 40 0 0 125 115 115
-50
MPS (shipments) 125 125 125 125 125 ＊ Entering 70 in period 4 instead of 20; ATP ∴ 3 = 125 – (105 + 70) = -50 & PA4 = 30 – max { 50,70} = -40 & so no for PA5……PA12
By rule #2 : A negative number on ATP is always a problem ! But No prior available–to-promise units can satisfy this 50 units. (although APT1=40) Means, everything else has been promised.
∴ ∴ We We can notcan not accept this purchase order for period 4 accept this purchase order for period 4 the earliest is in period 7 (why?)the earliest is in period 7 (why?)
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Using ATP practices
Example ＃ 3 ： Can you promise an additional order for 50 units to be delivered in period 8 ?
Example ＃ 4 ： An additional 30 units for period 12 ?
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 45 25 105 20 110 15 0 0 10 0 0 10
Projected available 110 60 10 30 -20 -5 -80 -30 20 -30 -80 -5 -55
ATP 40 0 0 125 115 115
MPS (shipments) 125 125 125 125 125
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Example ＃ 3 ： Can you promise an additional order for 50 units to be delivered in period 8 ?
Example ＃ 4 ： An additional 30 units for period 12 ?
< Solution to example #3 & #4 >
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
40
Customer orders 45 25 105 20 110 15 0 50 10 0 0 10
Projected available 110 60 10 30 -20 -5 -80 -30 20 -30 -80 -5 -55
ATP 40 0 0 125 115 115
65 85
MPS (shipments) 125 125 125 125 125
YesYes, we can accept these orders !, we can accept these orders ! (see above)
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§.§. Class Problems & DiscussionClass Problems & Discussion
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 45 25 105 20 110 15 0 0 10 0 0 10
Projected available 110 60 10 30 -20 -5 -80 -30 20 -30 -80 -5 -55
ATP 40 0 0 125 115 115
MPS (shipments) 125 125 125 125 125
Problem #1 : Can you accept an order of 80 units for period 7 ?
Problem #2 : Continues on problem #1 ( using the result from #1 )
Can an additional order for 90 units, to be delivered at period 10, be accepted ?
Problem #3 : Continues on problem #2 ( using the result from #2 ) Can you accept an additional purchase order of 75 units for period 9 delivery ?
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< Solution to problem #1 >
Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 45 25 105 20 110 15 80 0 10 0 0 10
Projected available 110 60 10 30 -20 -5 -80 -30 20 -30 -80 -5 -55
-35 15 -35 -85 -10 -60
ATP 40 0 0 125 115 115
45
MPS (shipments) 125 125 125 125 125
Accept the order {i.e. 80 units for period 7 }
Problem #1 : Can you accept an order of 80 units for period 7 ?
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Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Customer orders 45 25 105 20 110 15 80 0 10 90 0 10
Projected available 110 60 10 30 -20 -5 -80 -35 15 -35 -85 -10 -60
-125 - 50 -100
ATP 40 0 0 45 115 115
25
MPS (shipments) 125 125 125 125 125
< Solution to problem #2 >
Problem #2 : Continues on problem #1 (using the result from #1)
Can an additional order for 90 units, to be delivered at period 10, be accepted ?
Accept the order {i.e. 90 units for period 10 }
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Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
50 125 85
Customer orders 45 25 105 20 110 15 80 0 10 90 0 10
Projected available 110 60 10 30 -20 -5 -80 -35 15 -35 -125 -50 -100
-80 -30 -80 -170 -95 -145
ATP 40 0 0 45 25 115
35 0 - 50
MPS (shipments) 125 125 125 125 125 ＊ Violates rule #2 ATP8= – 50, need to be solved
＊ using 45 units from ATP7, ATP∴ 7 = 45 – 45 = 0
5 units from ATP1, ATP∴ 1 = 40 – 5 = 35
＊ Marking : 5 units at period 1 & 45 units at period 7 & 25 units at period 9 for this client’s name.
Problem #3 : Continues on problem #2 (using the result from #2) Can you accept an additional purchase order of 75 units for period 9 delivery ?< Solution >
0
35
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Period 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
50 125 35
Customer orders 45 25 105 20 110 15 80 0 85 90 0 10
Projected available 110 60 10 30 -20 -5 -80 -35 15 -35 -125 -50 -100
-80 -30 -80 -170 -95 -145
ATP 40 0 0 45 -50 115
35 0 0
MPS (shipments) 125 125 125 125 125
< Final Solution to problem #3 >
Accept the order {i.e. 75 units for period 9 }
Problem #3 : Can you accept an additional purchase order of 75 units for period 9 delivery ?
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The EndThe End