Aggregate Planning, MRP, and
Short Term Scheduling
9 Aug 2001
Introduction
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What – Determine the quantity and
timing of production for the immediate
future
Where – To meet forecasted demand
Why – Minimize costs
The Planning Process
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Aggregate planning ties strategic goals
to production plans
Medium range – 3 to 18 months
Requires:
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Measure of sales and output
Forecast of demand for the period
Method of determining costs
Model that combines forecasts and costs
Aggregate Plan Relationships
Marketing
Customer
Demand
Production
Capacity
Inventory
Procurement
Supplier
Performance
Finance
Cash Flow
Aggregate
Production Plan
Management
Return on
Investment
Capital
Engineering
Design
Completion
Human
Resources
Manpower
Planning
Capacity Options
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Change inventory levels
Change workforce size
Change production rates
Subcontracting
Using Part-Time Workers
Demand Options
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Influence demand
Back order during high demand periods
Counterseasonal product mix
Strategies
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Chase strategy
Level strategy
Mixed strategy
MRP Introduction
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What – Plan requirements for
components
Where – Where components of a
product are known
Why – Individual component needs are
dependant on the aggregate plan
Dependant Inventory Model
Requirements
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Master Production Schedule
Bills of Material
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Modular bills
Planning bills
Phantom bills
Accurate Inventory Records
Purchase Orders Oustanding
Lead Times for Each Component
Dealing With Changing
Requirements
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System Nervousness
Time fence
Pegging
Lot Sizing
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Lot for Lot
Economic Order Quantity
Part Period Balancing
Extensions of MRP
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Closed Loop MRP
Capacity Planning
MRP II
Short Term Scheduling
Introduction
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What – Scheduling or timing of
operations
Where – Timing of operations affects
the overall strategy
Why – Reduce costs, improve response
Scheduling
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Forward Scheduling
Backward scheduling
Scheduling criteria
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Minimize completion time
Maximize utilization
Minimize work-in-process
Minimize customer waiting time
Objective: Optimize resources so that
production objectives are met
Scheduling in ProcessFocused Work Centers
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Job shop, low volume, high variety
Schedule incoming orders without violating
capacity constraints
Check availability of tools and materials
before releasing an order
Establish due dates and check progress
Check work in progress
Provide feedback
Monitor work efficiency statistics
Loading Jobs in Work Centers
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Input-output control
Gantt charts
Sequencing Jobs at Work
Centers
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Priority Rules
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First Come, First Served
Shortest Processing Time
Earliest Due Date
Longest Processing Time
Critical Ratio
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Time Remaining / Workdays Remaining
Highest Critical Ratio is selected for
processing next
Limitations of Rules
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Scheduling is dynamic
Rules do not look upstream or
downstream
Rules do not look beyond due dates
Finite Scheduling
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Computerized
Short Term
Graphical
Interactive
Constraints and Bottlenecks
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Limit output in the production sequence
Increase capacity
Reroute work
Change lot size
Change work sequence
Accept idleness