Production Planning and Scheduling Production Planning Also Known
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Production Planning and Scheduling
Production Planning • Also Known as Aggregate Planning • Problem in Game: Set Production Every Period, Allocate Resources, Meet Demand • Set Pt = Production for t Wt = Workforce for t
Production Planning • Inputs: Resources (Rough-Cut Capacity Planning), Forecast, Inventory, Policies, Costs • Demand Options: Pricing, Shifting Demand, Promotion, Markets for New Demand, Partnering with Suppliers, Allowing Back Orders (Shortages) • Supply (Capacity) Options: Hiring/Layoff, Overtime, Temporary Workers, Inventories, Subcontracting, Expediting
Relevant Costs 1. Change in Production (E. g. Hire/Layoff) Costs 2. Inventory Holding Costs 3. Shortage Costs 4. Payroll Costs 5. Subcontracting Costs 6. Expediting Costs
Scheduling Strategies • Level Workforce • Steady Output • Match Demand, Chase • Mixed, Game Given: Beginning Inv. – Demand + Pt = End Inv.
Scheduling Techniques: (1) Heuristics • Informal Rules that Appear to Work • Rules are Developed (Often by Trial and Error) and Tested in Real World or Computer Simulation • Advantage: Rules Can Be Realistic. Disadvantage: Not Optimum.
Scheduling Techniques: (2) Linear Decision Rule • EOQ-Like Approach • TRC = Payroll + Holding + Shortage + Change in Pt = f(Pt, Wt) • Calculus Used to Find Best Pt and Wt E. g. Pt =. 2 Ft +. 1 Ft+1 +. 05 Ft+2 -. 1 It +. 1 Wt-1 • Advantage: Optimum Given that Equations “Fit”. Disadvantage: Cost
Scheduling Techniques: (3) Search Rules • Used with Simulation • Educated, Computer-Driven, Trial & Error • Advantage: Realistic Costs, Not Optimum but Close. Disadvantage: Uses Lots of Computer Time
Master Production Schedule (MPS) • Similar to Production Plan • Time Periods or “Buckets” are Smaller • Multiple Products are Shown: Disaggregating Done by Heuristics or Linear Programming • Example on Page 658
Summary of the Scheduling Process FORECAST ROUGH-CUT CAPACITY PLANNING PRODUCTION PLAN MASTER PRODUCTION SCHEDULE (MPS) MATERIAL REQUIREMENTS PLANNING (MRP) CAPACITY REQUIREMENTS PLANNING SHOP FLOOR CONTROLS VENDOR CONTROLS
MRP • Material Requirements Planning • Manufacturing Resource Planning (MRP II) • Translates MPS into Schedule of Component Requirements, Both Order Quantities and Times
MRP Inputs • Master Production Schedule (MPS) • Bill of Materials (Parts List, p. 660) • Inventory Status – On Hand • Lead Times
Bill of Materials: Problem 3. 1
Problem 3. 1 a Ear Plugs (2 x 1000) = 2000 Aspirin (1 x 1000) = 1000 Gas Masks (5 x 1000) = 5000 Boxes (1 x 1000) = 1000 Labels (1 x 1000) = 1000 Cardboard (1 x 5000) = 5000 Wax (2 x 2000) + (. 5 x 5000) = 6500 Labor Hours (. 08 x 2000) + (. 1 x 5000) = 660
Problem 3. 1 b, c b. Adjustment for Scrap: Scheduled Units = MRP / (1 – Scrap %) Scheduled Units = 5000 /. 97 = 5155 c. Standard Time = MRP / (1 - % Delay) ST = 0. 66 / 0. 8 = 0. 825 Hours Actual Time = ST / Labor Efficiency AT = 0. 825 /. 9 = 0. 920 Hours
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