Unit 6: Forecasting, Scheduling, and Planning Systems - Module 9-10-11

Maine Woods Company uses a time bucket of

1 week for tricycles in its master production schedule.

The lead time to buy or make parts and build a tricycle, toy wagon, or scooter is at least

10 weeks

Review the Maine Woods Company master production schedule for the three products in the "wheeled goods product group." The planning horizon shown in this master schedule is

3 months

An apparel company has an inventory of 2,500 units of style X and a demand or usage rate of 500 units per week. What is the run-out time?

5 weeks 2,500 units/500 units per week = 5 weeks

What is run-out time?

A calculation of how long it will take for the company to run out of a product at current usage rates

Which statement relates best to using a chase strategy when scheduling services?

A chase strategy works by adjusting production rates to match demand by varying the workforce and using overtime.

What characteristics are common to scheduling production for continuous processes and assembly lines?

A limited number of products, few possible routings, and small work-in-process inventories

The experts convey their opinions through a

A questionnaire is used to gather the information from the experts.

Which type of company might utilize a peak demand approach when scheduling production?

A transportation company provides a service that can only be provided at the time of demand. They might use a peak demand approach when scheduling.

Many constraints affect the forecast that companies make for the upcoming season. Constraints are evaluated during which of the five stages of forecast development.

Apply the model - Constraints are evaluated during the model application stage.

Which production process would probably be used in the production of automobiles?

Assembly line Automobiles are individual items that are produced on an assembly line.

Which production process would probably be used in the production of multiple ice cream flavors?

Batch process batch process exists when a process is stopped, equipment is changed, and the next product is made. This occurs when multiple flavors of ice cream are manufactured

If the manager asks each insurance agent to estimate their sales for the month and one salesperson predicts 200% increase in sales over the last month, which qualitative method should the manager use?

Buildup Under the buildup method, employees estimate their sales, and if an employee's estimate is not in line, it can be adjusted.

Recall the December/January master production schedule for the Maine Woods Company used in the previous activity. It had an ATP of -10 in week 1. The master scheduler met with Marketing to discuss the forecasted demand and customer orders. Marketing insists that the numbers are correct. Now the master scheduler needs to talk with Operations about whether the build quantity can be increased in week 1. Review the figure above, titled "Iterative process for developing a master production schedule." Which step of the iterative process does "talking with Operations about increasing the build quantity" represent?

Capacity OK? Marketing did not approve the previous trial of the master schedule, so it was sent back to be revised and now the master scheduler must verify if Operations has capacity to support an increase in the build quantity.

Which statement below represents an advantage of using the peak demand method of scheduling?

Capacity is available to accommodate customers when demand is high.

Which formula can be used to calculate a run-out time?

Current inventory/usage rate = Run-out time

One characteristic includes the amount of work assigned to a workstation with the most work and time and is called

Cycle time is the amount of work assigned to the station with the most work and time. It determines the capacity of the assembly.

Maine Woods Company has run MRP to determine how purchase orders and shop orders need to be changed to accommodate shipping the order to its customer a week early. This change means that several departments will need to begin work immediately on subassemblies for this order. What is the next action Operations needs to take?

Deliver a daily dispatch list to all departments based on the new priorities. The daily dispatch list is issued to departments each day, to determine the order in which jobs in the department should be completed.

What challenge is associated with scheduling a batch process?

Determining the number of units to produce in one batch and the sequence of batches

Which statement represents a dilemma when scheduling for continuous processes?

Determining when to change from making one product to making another. The scheduling problem in a continuous flow process requires determining when to change from making one product to making another.

During what stage of forecast development would the owner need historical sales information?

Develop and test the model. Past sales data can help the owner project demand for the coming year using a quantitative analysis

After another year of excellent performance, the aircraft company representatives visit your uncle's growing shop. They invite him to join their "Gold Vendor" program and the offer includes two new contracts for a new kind of conduit they will use in a new jumbo jet. They inform him that the "Gold Vendor" program will require him to document a centralized system for managing all data that originates in his company. He does not have to share the data with them, but must prove that he collects, stores and uses it. Of the three types of systems we have studied, which would you recommend if he wants to become a "Gold Vendor"?

ERP Your uncle's needs have expanded such that he now needs enterprise-level data to support his new contracts and fulfill the "Gold Vendor" program.

When operations managers use forecasting models, they should consider the forecast to be factual and complete.

False A forecast should not be taken as fact. A forecast is one scenario that managers must ground in reality. A forecast is not a complete answer, but rather one more piece of information.

Demand from customers is considered dependent demand, while demand generated by a firm's production process is considered independent demand.

False Dependent demand is usually demand for an item that is generated by a company's production process.

MRP II is an extension of MRP that become necessary when computer hardware speed exceeded MRP's ability to keep up.

False MRP II expanded a manufacturers' ability to add data from nonmanufacturing processes.

The peak demand approach and chase strategy are the only scheduling methods that can be used to deal with the uneven demand of services.

False Other methods such as scheduling appointments or reservations for service, increasing consumer self-service, creating adjustable capacity, sharing capacity, and cross-training employees can also be used to cope with uneven demand.

The bill of materials identifies the quantity of materials needed to support the master schedule.

False The material requirements plan (MRP) identifies how much of each material is needed to support the master schedule. The bill of materials identifies how much of each material is needed for a single item of the finished good.

An appliance manufacturer, Freddie's Fridges, has a time fence of 10 weeks. The Marketing Manager has just told Freddie that he expects a 20% increase in demand in 12 weeks. This increase should be captured in the current master schedule.

False The time fence is 10 weeks. Events outside the time fence are not captured in the master schedule.

Which planning approach involves evaluating past experiences to gain insights about the future?

Forecasting - Forecasting is an attempt to predict the future. Forecasts are usually the result of examining past experiences to gain insights into the future for the purpose of making plans.

Review the Maine Woods Company aggregate plan above. Note that the aggregate plan, as a medium-term planning tool, extends 12 months into the future. Maine Woods Company is developing a master schedule for the products in its wheeled goods product line. The master schedule for Maine Woods Company will only cover 8 to 12 weeks. Which of the following best explains why a master schedule will typically cover a shorter time frame than an aggregate plan?

Information about customer demand for the specific mix of products will be more accurate in the shorter term.

Which statement relates best to the scheduling of services when a peak demand approach is utilized?

It allows for demand to be met at all times under normal conditions.

Which statement represents an advantage of using the chase strategy in scheduling services?

It enables an organization to meet anticipated demand.

Which statement represents a disadvantage of using the chase strategy method of scheduling services?

It requires an extremely flexible workforce.

Answer the following questions as you consider how forecasting can help analyze the problems an organization experiences today. As a forecaster for a television studio's new season of programming, which constraint would most likely affect a show?

Lack of corporate sponsorship

Review the previous example about Monster Energy Company. MRP has been described as a tool which helps to "plan a meal." If a 15 ounce can of Java Monster Loca Moca is the meal, one of the ingredients is ____.

Liquid coffee is an ingredient which would be used to produce a 15 ounce can of Java Monster Loca Moca.

Your uncle runs a one-person job shop. He has just been awarded a contract by an aircraft manufacturer to build a very specialized seal for its new plane. The vendor does not demand access to any data from your uncle, just the finished product. He does not currently use a resource planning tool. Because of the volume of the contract, he asks you to recommend a system. Of the three we have studied, which would you recommend?

MRP Your uncle only needs to track the production of one simple item. MRP will provide him with planning power without disrupting his overall system.

After one year, your uncle has produced seals of high enough quality to qualify for the aircraft manufacturer's "zero defects vendor" program. In order to participate, he must supply the company with detailed data about his suppliers, ordering processes, shop layout, inventory and shipping procedures. He recognizes the need for a system to track and integrate all of his data. Of the three we have studied, which would you recommend?

MRP II gives your uncle the power to integrate systems such as finance, HR and shipping, which matches the customer's data requirements.

Which of the following differentiates MRP II from MRP?

MRP is primarily concerned with materials, while MRP II encompasses the entire manufacturing process

What statement relates to continuous processes, assembly lines, and batch processes?

Many batch operations use continuous flow or assembly line processing.

Which qualitative forecasting method starts at the bottom of the organization?

Many forecasting methods begin with top-down estimates of sales or production. One begins with employee estimates, which form the basis of a stack for the forecast.

MRP II is considered an improvement on MRP because:

More data, if managed properly, tends to drive better decisions. MRP II offers the ability to integrate and manage more data. If handled properly, better data results in better decisions.

A company produces three products X, Y, and Z. Product X has a run-out time of two weeks, Product Y has a time of four weeks, and Product Z three weeks, respectively. Which product should be produced next?

Product X The inventory of Product X will run out in two weeks and sooner than both Product Y and Z. It should be produced next.

Scheduling in manufacturing is complex because different production processes will also incur different problems, and certain criteria will, therefore, be more important. Which criteria or factors should be evaluated regardless of process types?

Providing goods when the customer wants them and minimizing flow time, WIP, machine idle time, employee idle time, and costs Six factors should be considered.

Maine Woods Company prides itself on carrying very little inventory of finished goods, and making products when they are due. One of Maine Woods Company's biggest customers contacted the Sales department to ask for its next order, which is due in three weeks, to be shipped a week early. This customer is rolling out a large promotional campaign for wooden toys to boost sales of children's toys. Once the Operations department agreed to try to finish production early, the master schedule was updated to move the customer order to an earlier time bucket. What is the next action Operations needs to take?

Run MRP again to determine changes to shop orders and purchase orders. Once the master schedule is updated, the next step is to run MRP again, in order to determine what shop orders and purchase orders need to be managed to support this change.

The peak demand approach and chase strategy are common approaches that can be used when scheduling

Services that cannot be produced for inventory to deal with uneven

Which of the following is not input data needed for MRP?

Shop order A shop order is type of planned order release that authorizes production to make certain component parts or subassemblies.

Many research firms exist to measure viewer preference for television shows. If you were called and asked questions a

Test the model

The output of the MRP table for the level 2 seat is

The Seat is a component in the Seat assembly. A purchase order to the seat vendor will be released as an output from the planned order release row in the Seat MRP table.

The qualitative forecasting method of starting at the bottom of an organization and making an overall estimate by adding together estimates from each element is known as the ________.

The buildup method requires starting at the bottom of an organization and making an overall estimate by adding together estimates from each element. For example, a brokerage firm could use this approach to forecast revenues from stock market transactions.

Recall from the previous module that Apple is likely to use the iPod product line as the basis of an aggregate plan. When Apple disaggregates its iPod aggregate plan, which of the following will be an output from the disaggregation?

The master production schedule for 5th generation iPod Touch in Space Gray and Silver - Disaggregation of an aggregate plan (which is at the product level) results in a master production schedule for each individual end item or product model.

A company has determined that the cumulative lead time to produce one of its products is five months. "Five months" will be the minimum

The master schedule's planning horizon is at least as long as the cumulative lead time for the product. If the lead time for this product is five months, then the master schedule will be at least five months, to ensure the company has the right mix of parts and other resources needed to build this product to meet customer demand.

What relevant criteria contribute to challenges in scheduling continuous production processes?

The minimization of costs and idle time The relevant criterion is usually minimizing cost, although minimizing the time the facility is idle often more important.

Which characteristic is considered important for scheduling to balance an assembly line?

The ratio of work to workstations - Along with assigning the same amount of work to each station, it is important to have the right number of workstations to determine the cycle time.

The timing of the count is the

The replenishment cycle is the period between orders to replenish inventory. In this case, the Inventory Manager has indicated that is monthly.

An appliance manufacturer, Freddie's Fridges, makes the Model X Compact Refrigerator, which is most often installed in motor homes and RVs. One of Freddie's suppliers has just notified the company that the lead time will increase from three weeks to five weeks. This supplier was already the longest lead time in the production process. What will be the effect on the time fence?

The time fence will increase by two weeks. The time fence typically corresponds to the cumulative lead time to make a product. If the lead time increased by two weeks on the longest lead time part, the time fence will also increase.

Which statement below represents a disadvantage of using the peak demand method of scheduling services?

The underutilization of capacity a large percentage of time

According to the Maine Woods Company bill of materials figure above, if the master schedule required 20 tricycles, then MRP would indicate 40 rear axle supports are needed.

True

Dependent demand refers to demand for a product that is generated by a firm's production processes.

True

Regression analysis can be used to predict both cross-sectional data and time-series data.

True

A time bucket can be one hour.

True A time bucket can be any amount of time a company uses to group demand and requirements for master schedules and material requirements planning.

For an automotive manufacturer, an aggregated plan would state the firm's planned monthly output by product group.

True An aggregated plan is a statement of planned output by product groups on a monthly basis.

The BOM is exploded each time a company runs MRP.

True In order to run MRP, a company must explode the bill of materials, that is, run MRP for all of the components and subassemblies which are part of the product shown in the master schedule.

Review the master schedule for Maine Woods Company in the previous activity. Because the table shows -10 for ATP in week 1, this master production schedule needs to be revised.

True The master schedule must show that all demand can be supported, because it is considered finalized. A negative available-to-promise means that customer demand cannot be supported based on the current build schedule. Marketing and operations will need to work together to revise the master schedule.

Moving from an MRP system to MRP II is likely to facilitate a better integration between manufacturing and human resources.

True While there are no guarantees, system integration and data sharing often lead to better integration of business functions.

Different operational processes require different scheduling techniques. However, managers use the same two key questions to determine which to deploy. Fill in the blank to complete each question.

When should a given job, order, or product be processed? The timing is critical.

Sequencing is another characteristic associated with balancing an assembly line. It involves determining the order for making different products. When is sequencing most important in scheduling to balance an assembly line?

When the product differences vary significantly Sequencing is most important when product differences are significant.

Apple is unlikely to use its aggregated plan to decide whether to

build a new distribution center

The control process for accurate forecasting involves

constant evaluation

Which of the following is a qualitative technique that can assist companies in their forecasting?

consumer surveys

Which production process would probably be used in the production of bulk paper?

continuous process The process of making paper involves shifting tasks from one workstation to another as trouble spots appear. This is a characteristic associated with a continuous production process.

There are many reasons for a company to develop forecasts. Through forecasting, companies will gain some

control in the future.

In order to deal with forecasting error, companies can

create contingency plans

Maine Woods Company has an inventory management system which is continually updated as parts (such as wood blocks, wheels, and front axles) are used in production. However, the Inventory Manager has found that a physical count of what is in stock should be made at least once a month in order to ensure errors are adjusted in the system. The physical count is a

cycle count is a physical inventory of the parts in stock.

Bad storms prevent corn shipments to make ethanol

dependent

Starbucks runs out of strawberry acai ingredients

dependent

Manufacturing companies must recognize which items are worked on in their process before other items. Raw material availability for these stages of production may vary. Inventory management is more critical for the

dependent demand items.

Maine Woods Company will next use its material requirements planning (MRP) system to determine how many wheels, platforms, etc to order to support the build schedule. MRP represents

dependent on demand

_____ is the first stage of the forecasting process.

determining objectives- The first stage of the forecasting process requires determining objectives, which is followed by developing and testing a model.

Toy wagons and scooters are each produced every other week in order to

evenly balance the use of capacity

The scheduling of continuous production processes are generally characterized by

few different finished products, few possible routings, and low work-in-process inventories.

o use an MRP II system, an organization needs all of the data required by MRP, plus data from sources such as

finance systems human resource shipping information

whereas independent demand involves

finished goods

By subtracting a forecast for one time period from the actual value for the same time period, a researcher is attempting to measure the

forecasting error

ne supplier for the wheel base on the toy wagons has a three-week lead time. This wheel base part is quite expensive, so Maine Woods Company minimizes the amount of inventory. Three weeks will likely be the

frozen period in the master schedule

The build quantities in the master schedule become a data input to the material requirements plan. The material requirements plan determines how many components or subassemblies are needed to make the build quantities. For companies which build custom products, the master schedule may be at the subassembly level. In that case, the material requirements plan will determine _____.

how many components are needed to make the build quantities. If the master schedule is at the subassembly level, then the material requirements plan will determine how many components are needed to build the subassemblies.

Apple, Inc. designs and produces consumer electronics. An aggregate plan for Apple would most likely be based on

iPods

An auto supply parts store opens

independent

Customers want to buy the Apple Watch

independent

Maine Woods Company has created a master schedule for the next 12 weeks for its "scooters." The master production schedule represents

independent demand

The ____ is the best person in the organization to choose which value to use in the upcoming forecast.

manager The manager has the historical information to decide which of the models has produced the best forecast for the company.

A ________, which is based on the aggregate plan, is designed to specify exactly what will be manufactured and when it will be manufactured.

master production schedule The master schedule—or master production schedule (MPS)—is based on the aggregated plan. The master production schedule disaggregates the aggregate plan because it is a specific statement of exactly what will be produced and includes a specific date for production.

Apple's aggregate plan is an example of

medium-term planning

When companies switched from MRP to MRP II, it enabled them to integrate data from

non-manufacturing departments MRP II enabled companies to add modules to their MRP systems that exchanged data with internal departments and processes.

Forecasts are an essential part of

planning

Dependent demand is based on a company's

production process

The ___ phase involves human judgement.

revising and evaluating - Human judgement is required when evaluating the forecasting model.

Review the bill of materials figure for the Maine Woods Company tricycle. The output of the MRP table for the level 1 Front assembly is a

shop order

How many units

should be processed at one time? Determining the number of units that can be processed at one time represents a key consideration.

In a master production schedule,

time fences serve as boundaries between periods in the planning horizon. Time fences act as boundaries between periods in the planning horizon and represent the limits for planning.

The product that represents 50% of the capacity needed for the wheeled product group is

tricycles