Disaggregation
Working with aggregate units facilitates intermediate planning.
But to put this plan into action we should translate it,
decompose it, disaggregate it and state it in terms of actual units
of products and for a shorter period
Aggregate planning was for 12 or more months.
Now we should break it down into shorter periods, say 2-3 months.
Disaggregation:
Breaking down the aggregate plan into specific products - from
aggregate product to real specific products - based on the
specific products, then calculating detail of manpower,
material and inventory requirements.
Disaggregation
Aggregate Plan
Month
Jan Feb
Lawn Mower
200 300
Master Schedule
Push
100 100
Self-propelled 75
150
Riding
25
50
Total
200 300
Total of aggregate and
disaggregate products are not
necessarily equal
Mar
400
100
200
100
400
Master Schedule
The result of disaggregation is a master schedule.
The Master Schedule shows quantity and timing of specific products.
It usually covers 6 to 12 weeks.
After preparing a tentative Master Schedule, a planner can do Rough-cut
Capacity Planning.
Rough-cut capacity planning is to check the feasibility of the Master
Schedule with respect to available manpower and machinery capacities,
storage spaces, and vendor capabilities.
It is just a rough check to ensure that the master schedule is achievable.
The master schedule then is used as the basis for short term planning.
Master Schedule
Aggregate plan: 12 months.
Master schedule: 12 weeks.
Master schedule is updated every 2 weeks.
Therefore, it is on a rolling basis, always we
have a disaggregated plan for the next 12
weeks.
Master Production Schedule (MPS)
Master schedule states quantity and delivery time of
specific products.
It says we need 75 push lawnmowers in January. But it does
not say how we get it - from production, or from inventory.
Master Production Schedule (MPS) is developed
based on Master Schedule.
MPS: Quantity and timing of planned production.
MPS determines the
Promised Inventory, and the
Production Requirements available to promise inventory for
each period.
Master Scheduling Process
Inputs
Outputs
Master production schedule
Beginning inventory
Forecast
Customer orders
Master
scheduling
Projected inventory
Uncommitted inventory
(Available to Promise)
The key idea is: we have a forecast, but it turns into and actual
order when we receive a customer order.
MPS starts with a preliminary calculation of projected inventory.
This reveals when we need production to get additional inventory.
Example; Projected on-hand Inventory
Beginning
Inventory
64
Forecast
Customer Orders
(committed)
Projected on-hand
inventory
Customer orders are
larger than forecast in
week 1
1
30
JUNE
2
3
30 30
4
30
5
40
33
20
10
4
2
31
1
-29
JULY
6
7
40 40
8
40
Forecast is larger than
Customer orders in week 3
Forecast is larger than
Customer orders in week 2
Master Production Scheduling Process
Negative projected on-hand inventory is the signal for
production.
Suppose the economic production lot size for this product is
70 units.
Whenever production is called, 70 units are produced.
The negative projected inventory of -29 in period 3 calls for
production, 70 units are produced, the projected inventory
becomes 41.
The same calculation continues across the whole planning
horizon.
Example; Projected on-hand Inventory
1
30
33
June
2
3
30
30
20
10
4
30
4
5
40
2
31
1
11
41
64
Forecast
Customer Orders
(committed)
Projected on
hand inventory
MPS
41
70
70
July
6
7
40
40
8
40
1
31
61
70
70
Example; Projected on-hand Inventory
1
30
33
June
2
3
30
30
20
10
4
30
4
5
40
2
31
1
11
41
64
Forecast
Customer Orders
(committed)
Projected on
hand inventory
MPS
41
70
70
July
6
7
40
40
8
40
1
31
61
70
70
Available To Promise (ATP)
June
64
Forecast
Customer Orders (committed)
Projected on hand inventory
MPS
1
30
33
31
2
30
20
1
3
30
10
41
70
4
30
4
11
5
40
2
41
70
6
40
July
7
40
8
40
31
70
61
70
1
Now we can determine available to promise at each period.
We use a look ahead procedure.
Sum booked customer orders week by week up to (not including)
the next week of production. This is booked orders.
The remaining inventory is ATP.
ATP is only calculated for the first week and for weeks in which
there is a MPS quantity. (In this example: weeks 1, 3, 5, 7, 8)
Available To Promise (ATP); First week
June
64
Forecast
Customer Orders (committed)
Projected on hand inventory
MPS
ATP
1
30
33
31
11
2
30
20
1
3
30
10
41
70
56
4
30
4
11
5
40
2
41
70
68
6
40
1
July
7
40
8
40
31
70
70
61
70
70
Available to promise in week 1 = Inventory in week 0 + Production
in week 1 - Customer Orders at week 1 - Customer Orders at week 2
ATP(1) = I(0)+ P(1) - CO(1) - CO(2)
ATP(1) = 64+0 -33 -20 = 11
This is an uncommitted inventory.
It can be assigned to week 1, week 2, or both.
Available To Promise (ATP); Other weeks
For other weeks, beginning inventory is removed from the formula:
ATP(3) = P(3)-CO(3)-CO(4)
ATP(3)= 70-10-4= 56
64
Forecast
Customer Orders (committed)
Projected on hand inventory
MPS
ATP
June
1
30
33
31
2
30
20
1
11
64
Forecast
Customer Orders (committed)
Projected on hand inventory
MPS
ATP
3
30
10
41
70
56
4
30
4
11
5
40
2
41
70
68
6
40
1
June
1
30
33
31
11
2
30
20
1
3
30
10
41
70
56
4
30
4
11
For weeks 7 and 8, no CO, therefore ATP = MPS
5
40
2
41
70
68
6
40
1
July
7
40
8
40
31
70
70
61
70
70
July
7
40
8
40
31
70
70
61
70
70
Updating ATP
As additional orders are booked, they would be entered into the
schedule.
ATP would be updated to reflect new booked orders.
Marketing can use updated ATP amounts to provide realistic
delivery dates to customers
Updating MPS
Changing to a master production schedule can be disruptive.
Particularly changes in the immediate periods of the schedule
Aggregate Plan is developed for say 1 year
Master Production Schedule is developed for a period of say 12
weeks.
MPS is updated say every 2 weeks, it is on a rolling basis.
1
2
3
Frozen
4
5
6
Firm
7
8
9
Full
10
11
Open
12
Assignment
Problem 1. Book Page 627.
Forecast of demand for the next four months is 70 units per
month
Committed customer orders for the next four months are 80,
50, 30, and 10, respectively. Order size is 100 units.
Beginning inventory is 0.
Prepare MPS
Prepare ATP
Solution to Problem 1
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
2
70
3
70
4
70
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
2
70
50
3
70
30
4
70
10
Solution to Problem 1
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
2
70
50
3
70
30
4
70
10
3
70
30
4
70
10
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
2
70
50
50
100
Solution to Problem 1
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
2
70
50
50
100
3
70
30
80
100
4
70
10
3
70
30
80
100
4
70
10
10
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
2
70
50
50
100
Solution to Problem 1
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
20
2
70
50
50
100
3
70
30
80
100
4
70
10
10
3
70
30
80
100
4
70
10
10
3
70
30
80
100
60
4
70
10
10
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
20
2
70
50
50
100
50
Month
Forecast
Customer Orders
Inventory on hand
MPS
ATP
1
70
80
20
100
20
2
70
50
50
100
50