APS Assignment: Planning Workflow
Objective
When you complete this exercise, you will have a better understanding of the planning
workflow and the difficulties of conventional planning techniques. In this exercise, you will
be performing planning activities without any planning tools.
Case
i2 Car Company is a car manufacturer located in Dallas, Texas and produces several different
car models. One of these models is called 300-RH. Currently, a planning solution prototype
is being built for the production and distribution of the 300_RH.
The workflow being implemented consists of Demand Planning, Master Planning, and
Demand Fulfillment.
Demand Planning involves generating an unconstraint forecast using historical data and any
other factors that may influence sales. Once the unconstraint forecast is generated, real time
negotiations are conducted with customers to generate a consensus forecast. Once a
consensus forecast is reached, this forecast is netted against the actual orders. The netting
process is performed so that i2 Car Company does not plan for forecast that already accounts
for some of the orders being received.
Producing a car requires thousands of components and operations. i2 Car Company has
several divisions for assembling different components of 300-RH. Currently, the focus is on
the Assembly Division where the final assembly of a car is performed. Three main
components that are used to assemble a car are; chassis, engine, and door. The components
are produced by other divisions and shipped to the Assembly Division, where they are
assembled into a car. The availability of components is considered unconstrained. Once the
car is assembled it is shipped to the car dealerships. The distribution process takes 24 hours.
The assembly time to manufacture a car is 3 hours per car. After assembling 30 cars the
assembly area has to be cleaned and setup for the next batch. This setup takes one day (24
hours). The facility operates 24 hours a day, Monday through Sunday. Upon completion of
assembly, the finished cars are taken to a closed parking lot where they are stored until they
are shipped to car dealerships.
The Master Planning solution should plan for the assembly and distribution operations to
fulfill forecast and orders separately, giving priority to orders. In addition, the planning
system should account for material and resource capacity constraints. Once the plan for
fulfilling forecast and orders is generated, the planning system should try to improve the plan
to insure the desired safety stock levels are met.
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After creating a plan for orders and forecast, the plan must be communicated to the sales
organization. i2 Car Company sales organization consists of three divisions: National, East,
and West Sales. The role of National Sales is to allocate and communicate the available
forecast production capacity to East and West Sales organizations according to what the
Assembly Division can assemble. In addition, National Sales is in charge of providing the
forecasts required for master planning purposes.
The Demand Fulfillment solution should represent the sales organization of i2 Car Company
and be able to perform the allocation of available production capacity to East and West sales
organizations according to predefined allocation rules. The Demand Fulfillment solution
should also allow the sales organization to receive customer orders and commit to customer
orders in real time.
Steps
1. Demand Forecasting
The actual sale figures for the first quarter of 1999 and the first week of 2000 is available for
forecasting purposes.
Forecast the sale figures for the rest of the first quarter of year 2000 by using a simple
forecasting method. You are free to use any forecasting method.
1999 Actual Sales
Weeks
East
West
1
15
20
January
2
3
15
15
20
20
4
16
19
January
2
3
4
5
16
19
February
6
7
16
17
18
17
March
8
17
17
9
18
16
10
19
16
5
February
6
7
8
9
10
11
20
15
12
20
15
11
12
2000 Actual Sales
Weeks
East
West
1
17
19
March
2. Demand Collaboration
The forecast for the rest of the first quarter of year 2000 determined by i2 Car Company is an
unconstraint forecast. Once the unconstraint forecast is generated, real time negotiations are
conducted with customers to generate a consensus forecast.
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After the negotiations with customers the following changes will be made to forecast:
Forecast Month
January
February
February
March
March
Forecast Week
Week 4
Week 7
Week 8
Week 9
Week 10
Changed Forecast
19
20
15
21
14
Seller
East
East
West
East
West
Update the forecast with changes made after negotiations with customers.
3. Forecast Netting
Once a consensus forecast is reached, this forecast has to be netted against the actual orders.
The netting process is performed so that we don’t plan for forecast that already accounts for
some of the orders being received.
For the last three weeks of January you have the following orders:
Orders
Quantity
Order1
Order2
Order3
Order4
15
30
10
20
W: Week
Date
Time
W2-D4
W3-D5
W3-D6
W4-D2
D: Day of the Week
12:00
12:00
12:00
12:00
Time: 12:00(noon time)
Determine if the orders are over or under the forecasted quantity and net the actual demand to
forecast.
You can use the following table to net the forecast:
Forecast Netting
January
Weeks
East
West
National
Orders
Netted Forecast
1
17
19
36
2
February
3
4
5
6
March
7
8
9
10
11
12
36
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4. Master Planning
Plan for the assembly operations only to fulfill forecast and orders separately, giving priority
to orders. In addition, the planning system should account for material and resource capacity
constraints.
You can use the following tables as an aid when you are doing master planning for the
assembly operation. Keep in mind the following points:
 The Assembly must be completed 24 hours before the due date, so that there is enough
time to deliver the cars.
 There has to be a setup time of 24 hours before and after assembly of at most 30 cars.
 Week 1 is already planned. You can schedule a setup at the end of Week 1 if necessary.
 Try to schedule orders in the weeks they are due (as just-in-time as possible).
Please use a pencil…
Week 1
Mon
Tue
Wed
Thu
Fri
Sat
Sun
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Represents capacity already used.
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Week 2
Mon
Tue
Wed
Thu
Fri
Sat
Sun
Mon
Tue
Wed
Thu
Fri
Sat
Sun
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Week 3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5
Week 4
Mon
Tue
Wed
Thu
Fri
Sat
Sun
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. Allocation Planning
After creating a plan for orders and forecast, the plan must be communicated to the sales
organization. The sales organization accepts the plan and generates Available to Promise
(ATP). The weekly ATP can be further subdivided into daily ATP.
You can use the following tables to note the latest ATP according to the plan generated. ATP
should be allocated to sub-sellers proportionally based on forecast for that time period.
Assume that the cars will be available to ship at 12:00 noon every day.
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ATP(Available to Promise) - Weeks
January
Weeks
1
2
3
National
East
West
4
ATP(Available to Promise) - Days
Days
National
East
West
1
2
3
Week 2
4 5
6
7
1
2
January
Week 3
3 4 5
6
7
1
2
3
Week 4
4 5
6
7
Note: ATPs are those quantities that could fulfill the “due date” requirement.
6. Order Promising
Once the ATP is generated new orders can be
orders:
Orders
Quantity Date
Time
Order5
6
W2-D4 12:00
Order6
7
W4-D4 12:00
Note: Time: 12:00(noon time)
quoted from that ATP. There are two new
Seller
East
West
Which order can be fulfilled with the current ATP picture? (no late fulfillment; no split order)
7. Master Planning
Repeat Steps 3 & 4 (no need to repeat Steps 5 & 6) for the updated orders (Order1 to
Order6). Note: each order must be delivered in one delivery. Plot the new MP solutions in
the table.
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