Aggregate Production Planning

Aggregate production planning is defined as the

process of development, analytics and maintenance of a schedule for the business' overall operations. It is usually medium range in nature, lasting anywhere from three to 18 months. The planned output levels, targeted sales and intended inventory levels are taken into account while preparing an aggregate plan. An efficient aggregate plan should do away with dayto-day scheduling

Definition:
Master Production scheduling (MPS) Translating a business plan into a comprehensive product manufacturing schedule that covers what is to be assembled or made, when, with what materials acquired when, and the cash required. MPS is a key component of material requirements planning It represents the critical linkage between planning and execution of operations. It is the next stage in the production planning process in any organisation after aggregate production planning is done.

HOW MPS WORKS

Information needed for MPS logic
Lot size Lead time

Product demand
Starting inventory

Relationship between MPS &APP

Aggregate production planning is a rough cut capacity

planning exercise on the basis of forecast quantities of products.

MPS makes use of actual customer orders for the

purposes of capacity planning and resource allocation to specific customer orders.

Master Production Scheduling Techniques

Available = inventory position at end of week
= starting inventory + MPS forecast

Plan to have positive inventory level

Buffer in case production below plan Or demand higher than anticipated

Utility of MPS
MPS is the process by which disaggregation of varieties

is done using this information additional planning is carried out to assign the required capacity to each variety. planning for the material required for production during each period is also done

Why MPS is required ?

. The most important reason is that at the stage of

aggregate production planning, normally forecast demand is taken for the purpose of estimating the capacity required when actual orders are received this information provides a better input MPS uses actual and the most recent information

 It ensures specific material and capacity availability in

a particular time period. As customer orders get amended and/or cancelled, the information has a bearing on capacity availability. The MPS module serves the important purpose of computing capacity available to promise.

FORECASTING

AGGREGATE PRODUCTION PLANNING

MARKET

CAPACITY PLAN

MASTER PRODUCTION SCHEDULING

MATERIAL PLAN

LABOUR

ACTUAL PRODUCTION

VENDOR

Link b/w MPS & other planning processes

As shown the figure MPS takes inputs from the order

in flow system and APP to perform the disaggregation exercise. Based on the disaggregation, capacity planning and materials planning are performed to ensure their adequate availability .If there is some infeasibility in either capacity or material availability, the plans are altered to arrive at possible production plans. Therefore, MPS determines what needs to be ultimately produced and what is demanded.

The stages involved in MPS

There are two stages involve in MPS
1.To update the projected demand based on earlier

forecast and current market information. 2. It involves the Disaggregation of product information and relating to specific material, and capacity requirements.

STEPS FOR ACTUAL PRODUCTION

Step 1. Incorporating current market information into the production plan Step 2.Disaggregation of product information

Step 1. Incorporating current market information into the production plan

MPS exercise is normally done several time during the

planning horizon. instance it is possible that additional information is available to the planner. while planning is done it is important that firm orders are also taken into consideration.

 . if the forecast quantities are higher than the firm

orders it is a normal practice to work on the basis of forecast quantities. On the other hand if the firm orders are more than the forecast quantity then it is desirable to incorporate this information for the purpose of planning .

STEP 2.Disaggregation of product information

At the time of APP an aggregate unit was chosen and

different varieties of a product or services were converted to equivalent product/services .

SUMMARY
MPS breaks the Sales & Operations plan into product

families. Maintains Desired Level of Customer Service Allows proactive control of inventory