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Aggregate Planning and Master Scheduling

The document provides an overview of aggregate planning and master scheduling, focusing on strategies for meeting uneven demand, techniques for aggregate planning, and the importance of disaggregating plans into specific product requirements. It discusses various approaches such as cut-and-try, linear programming, and simulation, along with the roles of MRP and ERP in managing production and inventory. Additionally, it highlights the significance of capacity requirements planning and the benefits of using MRP and ERP systems in optimizing business processes.

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15 views33 pages

Aggregate Planning and Master Scheduling

The document provides an overview of aggregate planning and master scheduling, focusing on strategies for meeting uneven demand, techniques for aggregate planning, and the importance of disaggregating plans into specific product requirements. It discusses various approaches such as cut-and-try, linear programming, and simulation, along with the roles of MRP and ERP in managing production and inventory. Additionally, it highlights the significance of capacity requirements planning and the benefits of using MRP and ERP systems in optimizing business processes.

Uploaded by

dsnote10pro
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Aggregate

Planning and
Master
Scheduling
Overview of the topic
● Basic Strategies for Meeting Uneven Demand
● Techniques for Aggregate Planning
● Aggregate Planning in Services
● Disaggregating the Aggregate Plan
● Master Scheduling
● Master Scheduling Process
● MRP and ERP
● MRP in Services
● Benefits and Requirements of MRP
● Capacity Requirements Planning
● ERP
What is Aggregate
Planning

It is concerned with matching supply


and demand of output over the
medium time range, up to 18 months
into the future.
Basic Strategies for Meeting
Uneven Demand:
● Use inventories to absorb changes in demand
● Accommodate changes by varying workforce
size
● Use part-timers, overtime, or idle time to
absorb changes
● Use subcontractors and maintain a stable
workforce
● Change prices or other factors to influence
Techniques for
Aggregate
Planning
A Cut-and-Try Approach
Involves costing out various productions
planning alternatives and selecting the one
that is best.
Linear Programming
Makes it possible to evaluate an infinite
number of production strategies and find
the minimum-cost alternative. It provides
a powerful methodology for not only
solving the problem but evaluating other
solutions that might be suggested, relative
to the best one.
Simulation Approach
This technique can be used to rapidly
evaluate a large number of difference decision
rules or production choices
Production plan for the JC Company for the
next 6 months:

>Note that many costs are


expressed in a different form
than typically found in the
accounting records of a firm.
>Therefore, do not expect to
obtain all these costs directly
from such records, but
obtain them indirectly from
management personnel, who
can help interpret the data.
Exhibit 11.3
Plan 1. Produce to exact monthly production requirements
using a regular eight-hour day by varying workforce size.
Plan 2. Produce to meet expected average demand over
the next six months by maintaining a constant workforce.
Plan 3. Produce to meet the minimum expected
demand (April) using a constant workforce on
regular time. Subcontract to meet additional
output requirements.
Plan 4. Produce to meet expected demand for all but the first two months
using a constant workforce on regular time. Use overtime to meet
additional output requirements.
● Each of these four plans focused on one particular
cost, and the first three were simple pure strategies.

● Obviously, there are many other feasible plans, some


of which would use a combination of workforce
changes, overtime, and subcontracting.
● Keep in mind that the cut-and-try approach does
not guarantee finding the minimum-cost
solution.

● However, spreadsheet programs, such as


Microsoft Excel®, can perform cut-and-try cost
estimates in seconds and have elevated this
kind of what-if analysis to a fine art.

● More sophisticated programs can generate


much better solutions without the user having to
intercede, as in the cut-and-try method.
Aggregate Planning in
Services
● Services occur when they are rendered
● Demand for service can be difficult to
predict
● Capacity availability can be difficult to
predict
● Labor flexibility can be an advantage in
services
● Most services can’t be inventoried
Disaggregating the
Aggregate Plan
● Refers to the breaking down the aggregate
plan into the specific product requirements
in order to determine labor requirements,
materials and inventory requirements.
● The result of disaggregating the aggregate
plan is a master budget.
Aggregate
Planning

Disaggregation

Master
Schedule
Master Scheduling
● It shows the planned output for individual
products rather than the entire product group,
along timing of production.
● It is the result of disaggregating the aggregate
plan.
● It contains important information for marketing as
well as for production.
● Master Production Schedule (MPS) indicates the
quantity and timing of planned production, taking
Master Scheduling Process

INPUTS OUTPUTS

BEGINNING INVENTORY PROJECTED INVENTORY

MASTER
FORECASTS SCHEDULING MASTER PRODUCTION SCHEDULE

UNCOMMITTED
CUSTOMER ORDERS
INVENTORY
WHO IS THE REPRESENTATIVE
OF THE REPUBLIC OF THE
PHILIPPINES FROM THE
RECENTLY CONCLUDED MISS
UNIVERSE 2021?

Answer:
RABIYA OCCEÑA MATEO
IS AN ATTEMPT TO
BALANCE CAPACITY AND
DEMAND IN SUCH A WAY
THAT COSTS ARE
MINIMIZED.
Answer:
AGGREGATE PLANNING
MRP and ERP
MRPs (Material Requirements Planning)
is a software solution that helps
manufacturers calculate more precisely what
materials they require, at what time, and in
what quantities.
MRP in Services

Restaurant
- Meal common components are complementary
ingredients (ex: bread, vegetables, condiments…)
- These components depend on the demand of food
- In the plan, food is seen as a finished product.

Example:
Preparation of Veal Picante, a very important meal for
the restaurant
Tree of the product structure
Benefits and Requirements of MRP

● The MRP system is widely credited for playing a crucial part in decreasing
factory inventory. It also assists in manufacturing industrial products that
are more complex
● MRP focus is on what materials are required and when they need to be
sourced. It is also helpful in product customisation
● MRP has historically been seen as giving additional advantage because it
is known to schedule and track every order whether for production or
purchase
CRP
Capacity Requirements Planning

The process of discerning a firm's available production


capacity and whether it can meet its production goals. The
CRP method first assesses the company's planned
manufacturing schedule. Then, capacity requirements
planning weighs this schedule against the company's
actual production capabilities to see if the current capacity
can successfully meet the existing production schedule.
Demand = 100 pages/minute
25 PAGES PER MINUTE
Demand = 100 pages/minute
50 PAGES PER MINUTE
Demand = 100 pages/minute
100 PAGES PER MINUTE
ERP
Enterprise Resource Planning (ERP)
A more complete software system that includes additional features
and functionalities to help manufacturers automate and streamline
business processes, not just related to manufacturing, but across
their entire enterprise.
A process used by companies to manage and integrate the important parts of
their businesses. Many ERP software applications are important to companies
because they help them implement resource planning by integrating all of the
processes needed to run their companies with a single system. An ERP software
system can also integrate planning, purchasing inventory, sales, marketing,
finance, human resources, and more.

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