Master Production Schedule - Assignment Example

Master Production Schedule Master Production Schedule 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.Negative projected on-hand inventory is the signal for production. Suppose the economic production lot size for this product is 75 units. Whenever production is called, 75 units are produced. Now we can determine available to promise at each period.

Period1234Forecast50505050Customer orders52352012Projected on hand inventory23487323MPS757575ATP-122043Sum booked customer orders week by week up to 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, 2, 3)Available to promise in week 1 = Inventory in week 0 + Production in week 1 - Customer Orders at week 1 - Customer Orders at week 2ATP (1) = I (0) + P (1) – CO (1) - CO(2)ATP (1) = 0+75 -52 -35 = -12Period1234Forecast50505050Customer orders52503012Projected on hand inventory23487323MPS757575ATP-27-533Change of the customer orders will lead to a negative ATP which is not favorable for the company.

It is thus not advisable to accept such an order.Question 6Period1234520Forecast8080606060Customer orders8280604020Projected on hand inventory8-281010MPS7070706260ATP-70-70-302