Chapter 3 Questions

Where is the resource bill used?

used in resource requirements planning. Here the resource bill is used for a single product.

What is the purpose of time fences? Name and describe the 3 main divisions.

*Time Fence is a position in time. Where various limitations or changes in operating procedures take place. TF are selected period during which the master scheduler is permitted to make changes. The purpose of TF is to control the flow by the production system. Changes that are far away from the planning horizon can create little or no cost or divide the manufacturing. TF are designed to help the decision making process. 1. Frozen Zone Capacity and materials are committed to specific orders Senior management's approval is usually required because it results in excessive costs, reduced manufacturing efficiency, and poor customer service. Frozen zone is defined by demand time fences - demand is usually based on customer orders, not forecast. 2. Slushy Zone Capacity and materials are committed to specific orders This is an area for trade offs Materials have been purchased and capacity is established Slushy zone is defined by planning time fence Changes in this zone need to be evaluated first. Often, the minimum length of the planning time fence is determined by the cumulative lead time of the product. 3. Liquid Zone Changes are routine and often made by computer program without the need for a planner. Any change can be made in MPS as long as it is within the limits set by the production plan. Changes to MPS will occur.

What functions does the MPS perform between sales and production?

-MPS forms a vital link between sales and production: 1. It makes possible valid order promises. MPS tells sales and manufacturing when good will be available for delivery 2. It is an agreed upon plan, and a contract between marketing and manufacturing. -Forms a basis for sales and production to determine what is to be manufactured. It is a device for communication and a basis to make changes that are consistent with the demands of the marketplace and the capacity of manufacturing.

What is a final assembly schedule (FAS)? What is its purpose?

-This is a schedule of what will be assembled. It is used when there are many options and it is difficult to forecast which combinations the customers will want. The final assembly takes place only when a customer order is received and is based on components planned in the MPS. It is responsible for scheduling from the MPS through final assembly and shipment to order. -Generally planning using a final assembly schedule -A schedule of what will be assembled -Used when there are many options and it is difficult to forecast which combination the customers will want. -MPS is done at the component level and final assembly takes place only when a customer order is received. -FAS schedules customer orders as they are received and is based on the components planned in the MPS -FAS is typically used in both MTS and MTO

What potential problems might arise if time fences are not used? Why?

1. Decision Making: the costs and benefits should be calculated before making a decision. When firms do not use time fences there would be a problem in decision making process because it depends upon the nature of the product and flexibility of the manufacturing process. In the absence of time fence the production process cannot be taken effective. 2. Loss in stability of the product process: when time fence is not used, there will be a loss of stability in the production process. If the demand time fence is used a particular time zone is set and the MPS will be in frozen state that does not allow any changes to the MPS. Hence, there will be a loss of stability in the production process if time fence is not used. 3. Increased cost: time fences are used to minimize costs associated with changing some aspect of an order that is close to completion. If time fences are not used in the production process, the cost increases die to rearrangement, rerouting with additional setups and buildup of work in progress inventory. 4. Decreased customer service: If time fences are not used there will be change in the quantity delivery which disturbs the schedule of other orders as a result the customer service decreases. As the stability lacks in the production process, hence the quantity changes over periods. Therefore, there will be a disturbance in the schedule of other orders also that leads to poor customer service.

What are the 3 steps in making an MPS?

1. Develop a preliminary MPS 2. Check the preliminary MPS against available capacity 3. Resolve differences between the preliminary MPS and capacity availability.

What four functions does the master production schedule (MPS) perform in the production planning system?

1. It forms the link between production planning and what manufacturing will actually build 2. It forms the basis for calculating the capacity and resources needed 3. It drives the materials requirements plan. As a schedule of items to be built, the MPS and bills of materials determine what components are needed from manufacturing and purchasing 4. It keeps priorities valid. The MPS is a priority plan for manufacturing

What is the ATP (available to promise)? How is it calculated?

Available to Promise (ATP): that portion of a firm's inventory and planned production that is not already committed and is available to the customer. Allows delivery promises to be made and customer orders to deliveries to be scheduled accurately. ATP = scheduled receipts + beginning inventory - actual orders scheduled before the next scheduled receipt

What types of production environments might use both the FAS and the MPS? Why?

FAS means schedule of finished goods in a MTO or ATO environment. The final assembly occurs only when a customer's order is received. A MPS is a plan that a company carries out for production and inventory. It places the quantity of each final item to be finished in each period of the planning horizon. FAS and MPS might both use MTO or ATO production because in both, demand is fulfilled from manufactures capability. FAS depends upon the factors planned in the MPS.

Does the MPS work with families of products or with individual items?

Individual end items

What is the purpose of a rough-cut capacity plan?

Once the preliminary master production schedules (MPSs) are made, they must be checked against the available capacity and decide whether critical resources are available to support the preliminary master production schedules (MPSs).

What would happen if the planning horizon for the master schedule were too short? Why?

Planning Horizon is the time period for which the plan is prepared. A planning horizon is the duration of time for which plans are made. A best possible plan should consider all the information related to future incidents. PH should meet at least the equivalent time needed to achieve the plan. Supporting the master production scheduling, the short planning horizon is the longest cumulative or end to end lead time (LT)

What is a planning horizon? What decides it minimum time? Why would it be longer?

Planning horizon: the time span for which plans are made and must cover a period at least equal to the time required to accomplish the plan and must include tie to assemble a customers order. It does not need to include the time necessary to manufacture the components For MPS the minimum planning horizon is the longest cumulative or end-to-end lead time. The planning horizon is usually longer because: 1. The longer the horizon, the greater the visibility 2. The better management's ability to avoid future problems or to take advantage of special circumstances

Where does the information come from to develop an MPS?

The production plan Forecasts for individual end items Actual orders received from customers and for stock replenishment Inventory levels for individual end items Capacity restraints

How do the production plan and the MPS relate to sales and the sales forecast?

The production plan and MPS uncouple the sales forecast from manufacturing by establishing a manufacturing plan. Together they attempt to balance available resources of plant. equipment, labor and material with forecast demand. They ARE NOT a sales forecast. The MPS is a plan for what production can and will do. Figure 6 pg. 51

At what level should MPS take place in a MTS environment?

a limited number of standard items are assembled from many components. Televisions and other consumer products are examples. The MPS is usually a schedule of finished-goods items.

At what level should MPS take place in a MTO environment?

many different end items are made from a small number of components. Custom tailored clothes are an example. The MPS is usually a schedule of actual customer orders.

At what level should MPS take place in an ATO environment?

many end items can be made from combinations of basic components and sub assemblies. For example, base color and add tints for the final order. Once a customer's order is received, can be combined according to order.