Intended learning outcomes: Explain the second task for establishing a master production schedule, which is the break down the production plan quantity for a product family into quantity for each product of the family.
Continuation from previous subsection (5.2.3)
Second task: Break down the production plan quantity for a product family into quantity for each product of the family. We often do not know the exact percentage for splitting the total product family demand into individual product or variant demands. To cover this uncertainty, we increase the percentage of each variant. This percentage is called the option percentage (see here Section 10.5.3). This procedure results in overplanning, which yields protection in the form of safety demand. Figure 5.2.3.3 shows example overplanning in the MPS, assuming an uncertainty of 20 %.
Fig. 5.2.3.3 The MPS for the first four weeks on the level of assemblies V1, V2, V3, including overplanning due to variant uncertainty.
This safety demand is in effect safety stock, or reserved stock, for the entire planning horizon to be covered. For details, see Section 10.5.4. The safety demand has to be planned at the beginning of the planning horizon. If the forecast indicates a large demand in one of the subsequent periods, the additional safety demand can be planned for that planning period. Figure 5.2.3.4 shows the first overplanning for January. An additional overplanning takes place for March, but only for the part that is not already overplanned in January.
Fig. 5.2.3.4 The MPS on the level of assemblies V1, V2, and V3, including safety demand (due to variant uncertainty) during the planning horizon.
For the rest of the planning period, the safety stock in the system corresponds to the safety demand for the maximal monthly demand. Because of the general uncertainty in the system, it is sometimes easier to plan the whole quantity at the start of the planning period. A coordinated final assembly schedule (FAS, see Section 7.1.5) maintains the service level at 100 %, meaning that consumption of the assemblies stays within the limits of the safety stock. For more details, the reader may refer to Section 7.2, where it is also explained that this kind of master scheduling is valid only as long as the number of variants to be planned in the MPS is significantly lower than the total demand quantity for the product family. Otherwise, a (customer) order penetration point (OPP) more upstream must be chosen.
Continuation in next subsection (5.2.3c).
Course section 5.2: Subsections and their intended learning outcomes
5.2 Master Planning — Long-Term Planning
Intended learning outcomes: Describe demand management, sales and operations planning as well as resource requirements planning. Explain master scheduling and rough-cut capacity planning. Disclose supplier scheduling: blanket order processing, release, and coordination.
5.2.1 Demand Management: Bid and Customer Blanket Order Processing and Demand Forecasting
Intended learning outcomes:: Describe demand management, customer bid, order success probability and customer blanket order. Present some aspects of demand forecasting.
5.2.2 Sales and Operations Planning
Intended learning outcomes: Present the concepts of sales plan, production plan, procurement plan, inventory policy, and inventory plan.
5.2.2b Resource Requirements Planning (RRP) and Iterative Master Planning
Intended learning outcomes: Present the concepts resource requirements planning (RRP) and aggregate plan. Explain sales and operations planning as an iterative master planning process.
5.2.2c Iterative Master Planning — an Example of Integrated Resource Management
Intended learning outcomes: Disclose an example of iterative master planning by comparing three production plans, with zero, two or four changes in production rhythm per year.
5.2.3 Master Scheduling — The Master Production Schedule (MPS)
Intended learning outcomes: Produce an overview on master scheduling and planning time fence. Present in detail the master production schedule (MPS) as a disaggregated version of the production plan. Explain the first task for establishing a master production schedule, which is the selection of the master schedule items.
5.2.3b Master Scheduling — Break Down the Production Plan Quantity for a Product Family into Quantity for Each Product of the Family.
Intended learning outcomes: Explain the second task for establishing a master production schedule, which is the break down the production plan quantity for a product family into quantity for each product of the family.
5.2.3c Rough-Cut Capacity Planning (RCCP)
Intended learning outcomes: Describe the third task for establishing a master production schedule, which is the process of rough-cut capacity planning (RCCP).
5.2.4 Supplier Scheduling: Blanket Order Processing and Blanket Release
Intended learning outcomes: Produce an overview on supplier scheduling. Explain the systematics of blanket orders and blanket releases with quantities and time periods.
