Master Production Scheduling
After reading this supplement, you will be able to . . . 1. discuss the importance of the master production schedule (MPS) and the nature of the information that can be derived from it. 2. develop an MPS in a make-to-stock environment. 3. compute available-to-promise quantities for end items.
schedule (MPS) a between T he masterproduction forthat enablesareasissuchlinkachieve itsthe firm’s broad strategies and tactical plans the firm to goals. The MPS provides essential information functional as operations, marketing, and finance. In this supplement, we discuss the master production scheduling process, the need for functional coordination, the way to develop an MPS, the information that an MPS provides to assist innegotiating delivery dates, and the managerial considerations for establishing and stabilizing the MPS.
MASTER PRODUCTION SCHEDULING PROCESS
Figure K.1 shows the master production scheduling process. Operations must first create a prospective MPS to test whether it meets the schedule with the resources (e.g., machine capacities, labor, overtime, and subcontractors) provided for in the aggregateproduction plan. Operations revises the MPS until it obtains a schedule that satisfies all resource limitations or determines that no feasible schedule can be developed. In the latter event, the production plan must be revised to adjust production requirements or increase authorized resources. Once a feasible prospective MPS has been accepted by plant management, operations uses the authorized MPS asinput to material requirements planning. Operations can then determine specific schedules for component production and assembly. Actual performance data such as inventory levels and shortages are inputs to the next prospective MPS, and the master production scheduling process is repeated.
supplement k . Master Production Scheduling
Master Production Scheduling ProcessAuthorized production plan Prospective master production schedule Are resources available? Yes No
Material requirements planning
Authorized master production schedule
Operations needs information from other functional areas to develop an MPS that achieves production plan objectives and organizational goals. Although master production schedules are continually subject torevision, changes should be made with a full understanding of their consequences. Often changes to the MPS require additional resources, as in the case of an increase in the order quantity of a product. Many companies face this situation frequently, and the problem is amplified when an important customer is involved. Unless more resources are authorized for the product, less resources will beavailable for other products, putting their schedules in jeopardy. Some companies require the vice presidents of marketing and manufacturing jointly to authorize significant MPS changes to ensure mutual resolution of such issues. Other functional areas can use the MPS for routine planning. Finance uses the MPS to estimate budgets and cash flows. Marketing can use it to project the impact of productmix changes on the firm’s ability to satisfy customer demand and manage delivery schedules. Manufacturing can use it to estimate the effects of MPS changes on loads at critical workstations. Personal computers, with their excellent graphic capabilities, give reports in readable and useful formats. Computers allow managers to ask “whatif” questions about the effects of changes to the MPS.DEVELOPING A MASTER PRODUCTION SCHEDULE
The process of developing a master production schedule includes (1) calculating the projected on-hand inventory and (2) determining the timing and size of the production quantities of specific products. We use the manufacturer of the ladder-back chair (see Chapter 12, “Resource Planning”) to illustrate the process. For simplicity, we assume that the firm does...