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Aggregate Planning. Aggregate planning is intermediate range capacity planning usually 2-12 months out Short Intermediate Long. Aggregation. Product families lumped together Inputs to the plan Forecast, Resources, Policies, Inventory, Costs

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aggregate planning
Aggregate Planning

Aggregate planning is intermediate range capacity planning usually 2-12 months out

Short

Intermediate

Long

aggregation
Aggregation
  • Product families lumped together
  • Inputs to the plan
    • Forecast, Resources, Policies, Inventory, Costs
  • Outputs – Cost, Levels of inventory, output, utilization
  • Plans roll
slide3
Brooke Cashion, operations manager at Kansas furniture, has received the following estimates of demand requirements. Assuming stockout costs for lost sales of $100, inventory carrying costs of $25/unit/month, and zero ending inventory, evaluate these two plans on an incremental basis.
  • Produce at a steady rate (equal to minimum requirements) of 1,000 per month and subcontract additional units at a $60 per unit premium cost.
  • Vary the workforce, which performs at a current production level of 1,300 units/month. The cost of hiring additional workers is $3,000/100 units produced. The cost of layoffs is $6,000/100 units cut back.
master scheduling
Master Scheduling

Master Production Schedule (MPS) is a “disaggregation” of the aggregate plan showing quantity and timing of end items.

Feasibility checked by the rough cut capacity plan

Inputs: beginning inventory, forecast, orders

Outputs: available-to-promise (ATP) inventory, production requirements

(we’re skipping ahead to pp. 522 – 524)

projected on hand inventory
Projected On-hand Inventory
  • Calculate projected on-hand inventory one week at a time

Projected on-hand = Inventory from – Current week’s

Inventory previous week requirements

  • The current week’s requirements is the larger of forecast and customer orders.
  • When projected on-hand inventory is negative, then production must occur.
available to promise atp inventory
Available to Promise (ATP) Inventory
  • ATP = uncommitted inventory (not already promised to another customer )
  • First week ATP

Beginning inventory + MPS – look ahead quantity

  • All other weeks’ ATP

MPS quantity – look ahead quantity

Look ahead quantity is the sum of booked orders until an MPS amount occurs. (Count the customer orders for the current period, plus the next period, and so on. Stop counting when you come to a period where an MPS quantity exists.)

mps example
MPS Example

Beginning inventory for period 1 = 50 units, lot size is 35.

mps problem
MPS Problem

Beginning inventory for period 1 = 30 units, lot size is 80.

material requirements planning
Material Requirements Planning
  • Dependent & Independent demand
  • Answers
    • what items?
    • how many?
    • When?
  • MRP Inputs
    • Bill of materials (BOM)
    • Master schedule
    • Inventory records
bill of materials
Bill of Materials

Product structure Tree

Level

X

0

B(2)

C

1

2

D(3)

E

E(2)

F(2)

slide12

How many more of each component is needed to make 15 Xs if there are 5 of each already in stock?

X

B(2)

C

D(3)

E

E(2)

F(2)

slide13
If 20 units of the end items are to be assembled, how many additional units of E are needed?

Item End B C D E F G H

LT 1 2 3 3 1 2 1 2

Amt 0 10 10 25 12 30 5 0

End

C

D(3)

B(2)

G(2)

E(2)

F(3)

E(2)

H(4)

E(2)

slide14
An order for the end item should be shipped at week 11. What is the latest the order can be started & still arrive on time?

Item End B C D E F G H

LT 1 2 3 3 1 2 1 2

Amt 0 10 10 25 12 30 5 0

End

C

D(3)

B(2)

G(2)

E(2)

F(3)

E(2)

H(4)

E(2)

mrp processing
MRP Processing

All #s are for the beginning of a period

  • Gross requirements - total demand
  • Scheduled receipts - open orders from vendors
  • Projected on hand - inventory at start of period
  • Net requirements - amt needed in each period
  • Planned-order receipts - qty to be received
  • Planned-order releases - amt to order ea. period
slide16
Electro Fans has just received an order for one thousand 20 inch fans due week 7. Each fan consists of a housing assembly, two grills, a fan assembly, and a switch. The housing assembly consists of a frame, two supports, and a handle. The fan assembly consists of a hub and five blades. The electrical unit consists of a motor, a switch, and a knob. With the lead times, on-hand inventory, and scheduled receipts shown construct;
  • a product structure tree
  • a time-phased product structure
  • a net materials plan