Level production plan Following is the general procedure for developing a plan for level producti

1. Total the forecast demand for the planning horizon.

2. Determine the opening inventory and the desired ending inventory.
3. Calculate the total production required as follows:
Total production = Total forecast + back orders+ending inventory - opening inventory
4. Calculate the production required each period by dividing the total production by the number
5. Calculate the ending inventory for each period.

Amalgamated Fish Sinkers makes a product group of fresh fish sinkers and wants to develop a p
The expected opening inventory is 100 cases, and the company wants to reduce that to 80 cases
The number of working days is the same for each period. There are no backorders. The expected

Period 1 2 3 4 5
Forecast(Cases) 110 120 130 120 120

a. How much should be produced each period?

b. What is the ending inventory for each period?
c. If the cost of carrying inventory is $5 per case per period based on ending inventory, what is t
d. What will be the total cost of the plan?

Period 0 1 2 3 4
Forecast (cases) 110 120 130 120
Production 116 116 116 116
End inventory 100 106 102 88 84
Carrying cost inventory $530 $510 $440 $420
Change production cost $0 $0 $0 $0
Total cost of the plan $530 $510 $440 $420

End inventory= initial inventory + Production - Forecast

ping a plan for level production in MTS environment

pening inventory
al production by the number of periods.

rs and wants to develop a production plan for them.

ts to reduce that to 80 cases by the end of the planning period.
no backorders. The expected demand for the fish sinkers is as follows:

Total
600

ending inventory, what is the total cost of carrying inventory?

5 Total
120 600
116 580
80 460
$400 $2,300
$0 $0
$400 $2,300
Chase strategy in MTS environment
Chase strategy Amalgamated Fish Sinkers makes another line of product called fish stinkers. Unf
and the company cannot build inventory for sale later. They must use a chase strategy and make
Inventory costs will be a minimum, and there should be no stockout costs. However, there will b
Suppose in the preceding example that changing the production level by one case costs $20
The opening inventory is 100 cases, and the company wishes to bring this down to 80 cases in th
Assuming that production in the period before period 1 was 100 cases

Period 1 2 3 4 5
Forecast(Cases) 110 120 130 120 120

a. How much should be produced each period?

b. What is the ending inventory for each period?
c. If the cost of carrying inventory is $5 per case per period based on ending inventory, what is t
d. What will be the total cost of the plan?

Period 0 1 2 3 4
Forecast (cases) 110 120 130 120
Production 100 90 120 130 120
Change production 10 30 10 10
End inventory 100 80 80 80 80
Carrying cost inventory $400 $400 $400 $400
Change production cost $200 $600 $200 $200
Total cost of the plan $600 $1,000 $600 $600

Production= Forecast - (End inventory - Actual inventory)

 uct called fish stinkers. Unfortunately, they are perishable
e a chase strategy and make only enough to satisfy demand in each period.
costs. However, there will be costs associated with changing production levels.
l by one case costs $20
this down to 80 cases in the first period

Total
600

ending inventory, what is the total cost of carrying inventory?

5 Total
120 600
120 580
0 60
80 400
$400 $2,000
$0 $1,200
$400 $3,200
Level production in MTO environment
Level production plan Following is a general procedure for developing a make-to- order level pro
1. Total the forecast demand for the planning horizon.
2. Determine the opening backlog and the desired ending backlog.
3. Calculate the total production required as follows:
Total production = total forecast + opening backlog — ending backlog
4. Calculate the production required each period by dividing the total production by the number
5. Spread the existing backlog over the planning horizon according to due date per period.

A local printing company provides a custom printing service. Since each job is different, demand
Over the next five weeks, the company expects that demand will be 100 hours per week. There
the company wants to reduce that to 80 hours. How many hours of work will be needed each w
What will be the backlog at the end of each week?

Period 0 1 2 3 4 5
Forecast (cases) 100 100 100 100 100
Production 104 104 104 104 104
Projected backlog 100 96 92 88 84 80

Total production 500+100-80= 104

The backlog for each week can be calculated as
Projected backlog = old backlog + forecast - production
e-to- order level production plan:

tion by the number of periods.

e per period.

different, demand is forecast in hours per week.

s per week. There is an existing backlog of 100 hours, and at the end of five weeks,
be needed each week to reduce the backlog?

Total
500
520
Level production in MTO environment
Level production plan Following is a general procedure for developing a make-to- order level pro
1. Total the forecast demand for the planning horizon.
2. Determine the opening backlog and the desired ending backlog.
3. Calculate the total production required as follows:
Total production = total forecast + opening backlog — ending backlog
4. Calculate the production required each period by dividing the total production by the number
5. Spread the existing backlog over the planning horizon according to due date per period.

A local printing company provides a custom printing service. Since each job is different, demand
Over the next five weeks, the company expects that demand will be 100 hours per week. There
the company wants to reduce that to 80 hours. How many hours of work will be needed each w
What will be the backlog at the end of each week?

Period 0 1 2 3 4
Forecast (cases) 100 100 100 100
Production 100 80 100 100 100
Change production 20 20 0 0
Projected backlog 100 80 80 80 80
Change production cost 400 400 0 0
make-to- order level production plan:

oduction by the number of periods.

e date per period.

ob is different, demand is forecast in hours per week.

hours per week. There is an existing backlog of 100 hours, and at the end of five weeks,
will be needed each week to reduce the backlog?

5 Total
100 500
100 480
0 40
80 400
0 800
Company Planning Information Unit of measure
Chase ending inventory (in days of supply) 50 Days of Supply
Hybrid ending inventory 1,000 Units
Quarterly inventory holding cost per unit $40 Dollars 40
Quarterly production per worker 100 Units
Employee productivity per day 1.593625 Units per Day
Current number of workers 10 Workers
HR costs per hire or layoff $4,000 Dollars 4000
Quarterly wages per worker $6,000 Dollars 6000
Number of working days in year 251 Days
Average daily usage (annual) 15.93625 Units per Day
Number of working days in Y1, Q1 62 Days
Number of working days in Y1, Q2 64 Days
Number of working days in Y1, Q3 63 Days
Number of working days in Y1, Q4 62 Days
Number of working days in Y2, Q1 62 Days
Forecast for Y2, Q1 (for chase) 400 Units
 Leveled Production Plan: Family A
Quarter 0 1 2
Forecast 400 1,000
Production (Leveled) 1,000 1,100 1,100
Ending Inventory 1,000 1,700 1,800
Days of Supply 107 113
Change in Production 100 0
Change in Workers 1 0
Number of Workers 10 11 11
Inventory Holding $ 68,000.00 $ 72,000.00
HR Change Costs $ 4,000.00
Wages $ 66,000.00 $ 66,000.00
Total Cost $ 138,000.00 $ 138,000.00

1. Producto total requerido

4000

3. Calculo del inventario final

4. Calcular dias de supply

5. Calculo numero de
trabajadores

employee productivity/days/ 98.80475

101.992
100.398375
98.80475
n: Family A
3 4 SUM
600 2,000 4,000
1,100 1,100 4,400
2,300 1,400
144 88
0 0
0 0
11 11
$ 92,000.00 $56,000.00 $ 288,000.00
$ 4,000.00
$ 66,000.00 $ 66,000.00 $ 264,000
$ 158,000.00 $ 122,000.00 $ 556,000.00

1000 1400 4400

4400 1100
4

4000 15.9362549801
251
Company Planning Information Unit of measure
Chase ending inventory (in days of supply) 50 Days of Supply
Hybrid ending inventory 1,000 Units
Quarterly inventory holding cost per unit $40 Dollars 40
Quarterly production per worker 100 Units
Employee productivity per day 1.593625 Units per Day
Current number of workers 10 Workers
HR costs per hire or layoff $4,000 Dollars 4000
Quarterly wages per worker $6,000 Dollars 6000
Number of working days in year 251 Days
Average daily usage (annual) 15.93625 Units per Day
Number of working days in Y1, Q1 62 Days
Number of working days in Y1, Q2 64 Days
Number of working days in Y1, Q3 63 Days
Number of working days in Y1, Q4 62 Days

Number of working days in Y2, Q1 62 Days

Forecast for Y2, Q1 (for chase) 400 Units
 Chase Production Plan: Family A
Quarter 0 1 2
Forecast 400 1,000
Production (Chase) 1,000
Ending Inventory 1,000
Days of Supply
Change in Production
Change in Workers
Number of Workers 10
Inventory Holding
HR Change Costs
Wages
Total Cost

1. Calculo para obtener los

inventarios finales

2. calcular producción por cada

periodo

3. Calcular el numero de
trabajadores
n: Family A
3 4 SUM
600 2,000 4,000
0

$ -
$ -
$ -
$ -
Company Planning Information Unit of measure
Chase ending inventory (in days of supply) 50 Days of Supply
Hybrid ending inventory 1,000 Units
Quarterly inventory holding cost per unit $40 Dollars 40
Quarterly production per worker 100 Units
Employee productivity per day 1.593625 Units per Day
Current number of workers 10 Workers
HR costs per hire or layoff $4,000 Dollars 4000
Quarterly wages per worker $6,000 Dollars 6000
Number of working days in year 251 Days
Average daily usage (annual) 15.93625 Units per Day
Number of working days in Y1, Q1 62 Days
Number of working days in Y1, Q2 64 Days
Number of working days in Y1, Q3 63 Days
Number of working days in Y1, Q4 62 Days
Number of working days in Y2, Q1 62 Days
Forecast for Y2, Q1 (for chase) 400 Units

2500 Hybrid production Plan

2000

1500

1000

500

0
Q1 Q2 Q3 Q4

Demanda Producción
 Chase Production Plan: Family A
Quarter 0 1 2
Forecast 400 1,000
Production (Hybrid) 1,000
Ending Inventory 1,000
Days of Supply
Change in Production
Change in Workers
Number of Workers 10
Inventory Holding
HR Change Costs
Wages
Total Cost

1. Producto total requerido

2000-1000+1400

2. Calculo del inventario final

3. Calcular dias de supply

4. Calculo numero de
trabajadores

employee productivity/days/
: Family A DemanProducción
3 4 SUM Q1 400 800
600 2,000 4,000 Q2 1000 800
0 Q3 600 800
-600 Q4 2000 1600

$ -

2400

99
102
100
99
 Reso
Bill of Resources—family Level (per 1000 Units)

Key Resources UOM

UOM A B C D
Machining hours 5 5 10 1 Production UOM
time plan: April
(in 1000s)
Packaged cubic feet 10 10 10 20 Machining hours
product time
space
Non-clean- hours 75 15 25 50 Packaged cubic feet
room labor product
space
Oven-curing cubic feet 10 10 20 30 Non-clean- hours
space room labor
Clean-room hours 20 10 15 40 Oven-curing cubic feet
labor space
Quarantine cubic feet 24 24 60 80 Clean-room hours
labor
Gold troy ounce 8 8 8 16 Quarantine cubic feet
Gold troy ounce

·        Load = planned prod

·        Total load = product

·        Load percent = (tota

 Resource Plan

Total Capac.
Product Families Load %
Load Avail.
A B C D
100 80 40 60

500 400 400 60 1360 1,500 91%

1000 800 400 1200 3400 3,600 94%

7500 1200 1000 3000 12700 9,600 132%

1000 800 800 1800 4400 3,600 122%

2000 800 600 2400 5800 6,000 97%

2400 1920 2400 4800 11520 12,000 96%

800 640 320 960 2720 3000 91%

·        Load = planned production x bill of resources category

·        Total load = product family a + product family b + product family c + product family d

·        Load percent = (total load/capacity available) x 100

oduct family d
Using the information provided below, what is the available-to-promise quantity in period
Lot Size 50 units
Period 1 2 3 4 5
Forecast 20 21 20 22 24
Customer Orders 19 20 21 21 25
Projected Available
20 0 29 8 36 11
Balance
Available-to-Promise
1 9 4
Discrete
Master Production
50 50
Schedule

Based on the information below, what would the cumulative available-to-promise quantit
Lot size 100
Week 0 1 2 3 4
Forecast 100 100 100 100
Customer Orders 80 20 10 40
Projected Available
225 125 25 25 25
Balance
Available-to-
125 215 275
Promise(cumulative)
Master Production
100 100
Schedule

Lot size =25 SS=10

Period 1 2 3 4 5
Forecast 20 18 25 15 12
Customer orders 20 18 25 15 12
Projected Available
15 20 27 27 12 25
Balance
Available-to-Promise
20 7 -15 13
Discrete
Master Production
25 25 25 25
Schedule
Lot size =25 SS=10
Period 1 2 3 4 5
Forecast 20 18 25 15 12
Customer orders 20 18 25 15 12
Projected Available
15 20 27 27 12 25
Balance
Available-to-Promise
20 27 12 25
cumulative
Master Production
25 25 25 25
Schedule
e quantity in period 2?

6 7 8
26 28 28
24 20 18

35 7 29

6 32

50 50

-to-promise quantity be in the first period?

Use the following example for an MTS environment. Note that ATP is discrete and the MPS receipt sch
·        On hand: 15
·        Planning time fence: 7
·        Lot size: 40
·        Safety stock: 8
·        Demand time fence: 2
DTF
Period 1 2 3 4 5 6
Forecast 20 20 20 20 20 20

Customer Orders 18 15 27 10 10 8

Projected
15 37 22 35 15 35 15
Available Balance

Available-to-
22 3 22
Promise Discrete

Master Production
40 40 40
Schedule

Given the above information, if additional customer orders were received for 12 units in period 4 and bo
is permitted if it were to go negative, what ATP quantities will appear in periods 1 through 4 after accep

DTF
Period 1 2 3 4 5 6
Forecast 20 20 20 20 20 20

Customer Orders 18 15 27 22 10 8

Projected
15 37 22 35 13 33 13
Available Balance

Available-to-
13 0 22
Promise Discrete

Master Production
40 40 40
Schedule

SS=10
Lot size=30 DTF
Period 1 2 3 4 5 6
Forecast 20 20 20 20 20 20
Customer Orders 19 20 21 21 25 24

Projected
15 26 36 15 24 29 35
Available Balance

Available-to-
19 8 17 22 8
Promise Discrete

Master Production
30 30 30 30 30
Schedule

Complete the following problem. The lead time is one week and the demand time fence is the end of we
DTF
Period 1 2 3 4 5 6
Forecast 20 21 22 20 28 25

Customer Orders 19 18 20 18 30 22

Projected
20 1 43 23 3 33 8
Available Balance

Available-to-
Promise 1 5 13
cumulative

Master Production
60 60
Schedule

Product A is an assemble-to-order product. It has a lot size of 100, and currently has an on-hand invent
There is a 1-week demand time fence and a 12-week planning time fence. The following table gives the

Period 1 2 3 4 5 6
Forecast 40 50 50 60 60 60

Customer Orders
40 52 70 65 67 45
Projected
30 90 38 68 3 36 76
Available Balance

Available-to-
Promise 38 3 36 41
cumulative

Master Production
100 100 100 100
Schedule

How you would respond to each of the following customer order requests? Assume these are independ
■ 10 units in week 3
■ 30 units in week 4
■ 10 units in week 9

Given the following master schedule, fill in the projected available and available- to-promise rows:
Lot Size = 75
Period 1 2 3 4 5 6
Forecast 40 40 40 40 30 30

Customer Orders
60 60 55 35 40 5

Projected
10 36 62 7 53 13 80
Available Balance

Available-to-
Promise 36 7 18 30
cumulative

Master Production
86 86 86 97
Schedule

b. A customer wants an order of 15 in period 2. Can it be accepted?

c. What is the possibility of accepting an order of 30 units in week 5?
d. Continued from part b, find the possibility of accepting an order of 25 units in week 3.
e. Can we accept an order of 75 units in week 7?

On Hand = 56
Lot size = 60 DTF
Period 1 2 3 4 5 6
Forecast 22 25 20 20 18 18

Customer Orders
24 23 32 22 15 19

Projected
56
Available Balance

Available-to-
Promise
cumulative

Master Production
Schedule

Suppose a customer requests

20 of product A in week 4.
e and the MPS receipt scheduled in period 1 was carried over from a previous plan.

PTF
7 8
20 20

6 5

35 15

29

40

2 units in period 4 and borrowing from prior period ATP

s 1 through 4 after accepting the order but prior to re-stating?

PTF
7 8
20 20

6 5

33 13

29

40

PTF
 7 8
20 20
20 18

15 25

20

30

me fence is the end of week 3. There are 20 on hand. The lot size is 60.

7 8
0 0

0 0

0 0

tly has an on-hand inventory of 30 units.

e following table gives the original forecast and the actual customer orders for the next 12 weeks:

7 8 9 10 11 12
70 70 55 55 55 55 680

50 50 56 53 52 44 644
 6 36 80 25 70 15

91 82 86

100 100 100

sume these are independent requests, and do not have cumulative effects.

le- to-promise rows:

7 8
50 50

80 0

0 36

116

86

of 25 units in week 3.

7 8 9 10 11 12
32 30 28 28 29 23

17 16 12 16 13 11
12 weeks:
Suppose the following production plan is developed for a family of three items:
S&OP
Week 0 1 2 3 4
Aggregate Forecast (units) 160 160 160 160
Production Plan 205 205 205 205
Aggregate Inventory (units) 545 590 635 680

Opening inventories (units) are

Product A 350
Product B 100
Product C 50
Total 500

Forecast by products
Week 0 1 2 3 4
Product A 70 70 70 70
Product B 40 40 40 40
Product C 50 50 50 50
Total 160 160 160 160

Master Schedule
Week 0 1 2 3 4
Product A
Inventory Product A 350 280 210 140 70
Product B 205 205
Inventory Product B 100 60 20 185 350
Product C 205 205
Inventory Product C 50 205 360 310 260
Total aggregate inventory 500 545 590 635 680
Total 205 205 205 205

The Hotshot Lightning Rod Company makes a family of two lightning rods, Models H and I. It bases its production planning on
For the present month, production is leveled at 1000 units. Opening inventory is 500 units, and the plan is to reduce that to 30
The MPS is made using weekly periods. There are 4 weeks in this month, and production is to be leveled at 250 units per week
The forecast and projected available for the two lightning rods follows. Calculate an MPS for each item.
S&OP
Week 0 1 2 3 4
Aggregate Forecast (units) 300 350 300 250
Production Plan 250 250 250 250
Aggregate Inventory (units) 500 450 350 300 300
Master Schedule
Week 0 1 2 3 4
Forecas Produc H 200 300 100 100
PAB Product H 200 250 200 100 250
MPS Product H 250 250 250
Forecas Produc I 100 50 200 150
PAB Product I 300 200 150 200 50
MPS Product I 250 0
Total Forecast 300 350 300 250
Total aggregate inventory 450 350 300 300
Total Production 250 250 250 250
 5 6
215 250 1105
205 205 1230
670 625 3745

5 6
70 80 430
95 120 375
50 50 300
215 250 1105

5 6
205
0 125

255 135
205
415 365
670 625 3745 3745
205 205 1230 1230

. It bases its production planning on weeks

s, and the plan is to reduce that to 300 units by the end of the month.
s to be leveled at 250 units per week.
for each item.

5 6
1200
1000
1400
5 6

1200
1400
1000