Product Mix Master Production Scheduling 1 Product Mix

Product Mix & Master Production Scheduling 1

Product Mix Problem n Quantity of Each of Multiple Products to Produce - Example: How Much of Various Flavors of Ice Cream to Produce? n Solution Methods - Hueristics - Linear Programming 2

Linear Programming (L. P. ) n Continuous Decision Variables n Decision Variable Subject to Constraints n n Objective Function that is Maximized or Minimized Equations or Inequalities are Linear 3

Consider the Following: The businessperson, Cindy Light, publishes two magazines, Paygirl (for men) and Payboy (for women). Monthly sales average about 6, 000 and 4, 500 issues respectively for the publications. Paygirls contribute $. 60 per issue to net profits; Payboys add about $. 50 per issue. No left over magazines are desirable. Each Paygirl requires two minutes of actual machine and labor time to produce. Payboys only require one minute. There are 10, 000 total minutes per month of time available. Inventory storage space imposes another limitation. 48, 000 cubic inches are available and each magazine uses up about 8. Determine monthly production for each magazine. 4

E. g. L. P. Formulation n X 1: Issues of Paygirl X 2: Issues of Payboy Objective Function: Max. Z =. 6 X 1 +. 5 X 2 Subject to (s. t. ): 2 X 1 + X 2 10, 000 (Labor) 8 X 1 + 8 X 2 48, 000 (Inventory) X 1 6, 000 (Demand) X 2 4, 500 (Demand) X 1, X 2, 0 5

Linear Programming (L. P. ) n n We Can Use the Computer (Simplex Method Using POM for Windows) to Find the Answer. The Answer Would Be Incorporated in the Master Production Schedule 6

Master Production Scheduling (MPS) n n Link between Production Planning and What is Built or What Service is Performed Used for Calculating Resource and Capacity Needs n Drives Material Requirements Plan (MRP) n Keeps Priorities Valid – Is Negotiated Agreement 7

MPS Differs from Production Plan n Shorter Time Buckets Used for Each End Item Not Families of Items as in Production Plan Generally More Detailed 8

Items in MPS Must Add Up to What’s in Production Plan WEEK 1 UNICYCLES BICYCLES 2 3 100 50 100 5 6 50 40 100 TRICYCLES TOTAL - Production Plan 4 100 100 40 50 20 100 9

What “End Items” Go into MPS 10

MPS Can Show Running Inventory Made to Stock Only WEEK 0 FORECAST AVAILABLE MPS 200 1 2 3 4 TOTAL 200 300 100 700 250 200 100 250 100 11

Optimizing MPS n Develop Preliminary Plan n n Maintain Desired Customer Service by Optimizing Available Goods Make Best Use of Resources (Materials, Labor, Equipment) Check Preliminary Plan Against Capacity Resolve Differences Between MPS and Capacity 12

MPS with Minimum Available of 100 WEEK 0 FORECAST AVAILABLE MPS 200 1 2 3 4 TOTAL 200 300 100 700 250 200 100 250 100 13

MPS and Capacity Made to Stock (Two Hours per Bike; Three Hours per Trike) WEEK 1 2 3 4 5 6 BIKES 10 20 30 20 40 0 TRIKES 20 10 0 30 TOTAL HOURS 80 70 120 70 80 90 CAPACITY 100 100 100 14

ATP (Available to Promise) n n Portion of Inventory Not Committed – Available to Customer ATP = Scheduled Receipts + Beginning Inventory - Actual Orders Scheduled 15

ATP Calculation On Hand: 100 n n n ATP (1) = 100 – 80 = 20 ATP (2) = 100 – (10+10) = 80 ATP (4) = 100 – 30 = 70 WEEK 1 2 3 CUSTOMER ORDERS 80 10 10 MPS ATP 20 4 5 6 30 100 80 70 16

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