Chp 1

Order qualifier – Cx requirements. Engineer-to-order (customer’s specifications and Cx highly involved, long lead time. Inv purchased after order is received).
Make-to-order does not start to make until order is received. Make-to-stock – shortest delivery time. Performance measure - quantified and objective and
contain at least two parameters. Performance standards - Transforming company policies into objectives and specific goals. Finance must keep investment and
costs low. Production must keep its operating costs as low as possible.(Low Cx service, Few disruptions, High inv). Marketing’s objective is to maintain and
increase revenue(High Cx service, Many disruptions to prod, High inv). Three elements to a material flow system: supply, manufacturing planning and control,
and physical distribution. Channel master/orchestrator – integrated upstream or downstream. Postponement - long lead time and many products
configuration. Material- flows from producer to customer. Design information - from customer to supplier. Activities of manufacturing planning and control -
Production planning Implementation and control Inventory management. Metrics - measurement of performance.
Chp 2
Priority – What products, how many, when needed. Marketplace establishes the priorities. strategic plan – 2 to 10 yrs. Strategic business plan – 6 months – 1
yr. Aggregate production plan - combine product groups or product families rather than individual products. Production plan (concerned with strategic business
plan). The planning horizon is usually 6 to 18 months and reviewed each month or quarter. Production planning objectives- low inventories, efficient plant
operation, good customer service, and good labour relations. MPS is a plan for the production of individual end items. Plans are reviewed and changed weekly
or monthly. MPS is greater than for the production plan(Level of detail) 3 to 18 months. MRP - planning horizon is usually 3 to 18 months. Plan for the
production and purchase of the components used in making the items in the master production schedule Production activity control (PAC)- planning horizon is
very short, day to month(high level of detail). Annually – strategic business plan. Monthly - marketing plan and production plan . Weekly/daily – detailed sales
plan and MPS. S&OP updated monthly (regular basis) long-term planning of manufacturing activity. Medium range – executive level planning. Manufacturing
resource planning MRP II provides coordination between marketing and production. ERP encompasses the total company(closed loop). Chase - Inventory levels
remain stable while production varies to meet demand (minimum inventories). Make-to-Stock- constant demand, few products, long shelf life. Past-due
customer orders - backorders. Backlog - Delivery in the future and does not represent orders that are late or past due. Resource bill - Quantity of critical
resources needed to make one average unit of the product group. Capacity planning - Determining the need for labor, machines, and physical resources to meet
the production objectives of the firm. Production planning-setting the limits or levels of manufacturing operations based on the market plan and resource
availability. Product groups should be established on the basis of similarity of manufacturing process. Supply planning. Comparison of demand forecasts with
capacity constraints. Production leveling is continually producing an amount equal to the average demand
Chp 3
Marketing and sales dept gives information for forecast. Master production schedule (MPS) - basis for calculating the capacity and resources needed, drives the
material requirements plan, MPS is a priority plan for manufacturing, basis for sales and production, last line of the matrix, built from forecasts and actual
demands. Rough-cut capacity planning - preliminary master production schedules must be checked against the available capacity. Make-to-stock - limited
number of standard items are assembled from many components. FAS is not an input of MPS. Make-to-order products - different end items are made from a
small number of components. FAS is typically used in both the ATO and MTO environments. Postponement - shift customer influence on the final design as close
as possible to the furthest point in the supply chain. Demand is satisfied from production capacity – MTO & ATO. Frozen zone. Capacity and materials are
committed to specific orders(demand time fence). Slushy zone. - planning time fence. Liquid zone - Changes made by the computer program without the need
for input from the planner.
Chp 4
Independent demand -outside sources, forecast demand. Dependent = calculated( related to the production of end product). Dependency can be horizontal or
vertical. Parent = vertical. Planners concerned with horizontal. MRP - priority planning techniques for planning component items below the end item level. MRP
has two objectives: determine requirements and keep priorities current. Issue orders to purchasing and manufacturing. MRP plans the release and receipt dates
for orders. Three primary inputs to MRP systems:1. Master production schedule 2. Inventory records.( planning factors – lead time, order quantities / data-
maintained inventory record, also called a part master or item master) 3. Bills of material(parts required to make one of the items). Single-level bills -
Duplication of records is avoided. Priority refers to maintaining the correct due dates. Multilevel bills are formed as logical groupings of parts into subassemblies
based on the way the product is assembled / reflects the way the product will be manufactured. (indented bill of material). Multiple bill is used when
companies usually make more than one product, and the same components are often used in several products. Planning bills - artificial grouping of components
for planning purpose. represent average product and not buildable product. Where use reports – parents for a component .Pegging - only those parents for
which there is an existing demand requirement(keeps track of the origin of the demand). BOM USES - Product definition - components needed to make the
product. Engineering change control. Service parts - Replacement parts needed to repair .Planning - what materials have to be scheduled, what components
have to be purchased. Order entry - configures the end product. Used to price the product. Manufacturing. provides a list of the parts needed. Costing. Lead
time is the span of time needed to perform a process. Exploding is the process of multiplying the requirements by the usage quantity. Offsetting is the process
of placing the exploded requirements in their proper periods based on lead time. Scheduled receipts – financial commitment(orders placed on manufacturing),
Planned order – suggestion(gross requirement), release order – approved order(authorization is given to purchasing), firmed order – reservation, Open orders -
Scheduled receipts on the MRP record. Basic MRP Record - top row shows periods, called time buckets. number of periods in the record is called the planning
horizon. most current period is called the action bucket. Exception messages, Transaction messages - some event has occurred and must be reflected in the
software in order to ensure the MRP records are updated. Firm planned orders are controlled by the materials planner. Priority refers to maintaining the correct
due dates. Multi-level bill- reflects the way the product will be manufactured. firm planned orders - controlled by the materials planner. Released orders.
Releasing, or launching, a planned order is the responsibility of the planner. When released, the order becomes an open order to the factory or to purchasing
and appears on the MRP record as a scheduled receipt
Chp 5
Capacity is a rate of doing work, not the quantity of work done(amount of work that can be done in a specified time period.). Capacity available - produce a
quantity of output in a given time period. Capacity required - produce a desired output in a given time period. Capacity planning is the process of determining
the resources required to meet the priority plan and the methods needed to make that capacity available. Determine the capacity available, Determine the load,
resolve differences between available capacity and required capacity. Capacity management is responsible for determining the capacity needed to achieve the
priority plans as well as providing, monitoring, and controlling that capacity so the priority plan can be met Capacity control is the process of monitoring
production output, comparing it with capacity plans, and taking corrective action when needed. Resource planning involves long-range capacity resource
requirements and is directly linked to production planning(changes in staffing, capital equipment, product design). Rough-cut capacity planning (RCCP)- The
master production schedule is the primary information source(check the feasibility of the MPS, provide warnings of any bottlenecks, ensure utilization of work
centers, and advise vendors of capacity requirement. Capacity requirements planning (CRP)- concerned with individual orders at individual work centers. Levels
of capacity - Machine or individual worker, work center, production line or cell, plant, which can be considered as a group of multiple work centers. Types of
capacity available: theoretical; calculated or rated; and demonstrated or measured. The percentage of time that the work center is active compared to the
available time is called work center utilization. Theoretical capacity is the maximum capacity available, Rated capacity- The available capacity at a work center
for a period of time. Rated capacity is used to measure against demand. Demonstrated - historical output. Load report shows future capacity requirements.
Back scheduling( common in a make-to-stock environment) - The usual process is to start with the due date and, using the lead times, to work back to find the
start date for each operation. Forward scheduling – Launch the order into the first work center, use lead times to find when the order will be completed.
Available capacity will be influenced by I. product specification II. product mix. III. work effort. Utilization - percentage of time the work center is active
compared to the available time. Open shop orders appear as scheduled receipts in the MRP. Information on queue and wait time can be obtained from the work
center file. load profile- shows the capacity required at each work center based on planned and released orders. Theoretical capacity - no regard for downtime,
utilization, and efficiency.
Chp 6
Production activity control (PAC) is responsible for executing the master production schedule (MPS) and the material requirements plan (MRP). Manufacturing
processes - 1Flow manufacturing - production of high-volume standard products (short term detailed planning). 2 Intermittent manufacturing – many
variations in product design, process requirements, and order quantities(PAC complex), throughput times are generally high. 3 Project manufacturing - creation
of one unit or a small number of units. Data requirements- 1 item master - There is one record in the item master database for each part number. 2 product
structure – list of the single-level components and quantities needed to assemble a parent. 3 routing - series of operations required to make the item. 4 work
center master - collects all of the relevant data on a work center. Shop order master - summarized data on each shop order. Manufacturing lead time 1.Queue
time, amount of time the job is waiting at a work center before operation begins. 2. Setup time, time required to prepare the work center for operation. 3. Run
time, time needed to run the order through the operation. 4. Wait time, amount of time the job is at the work center before being moved to the next work
center. 5. Move time, transit time between work centers. Cycle time - length of time from when material enters a production facility until it exits. Operation
overlapping - difference between process batch and transfer batch. A process batch is the total lot size that has been released to production. A transfer batch is
that quantity that moves from work center to work center. Throughput is the total volume of production passing through a facility. Utilization of a no bottleneck
resource is not determined by its potential but by another constraint in the process. Using a no bottleneck resource 100% of the time does not produce 100%
utilization. The capacity of the facility depends on the capacity of the bottleneck. Time saved at a no bottleneck does not save capacity elsewhere. Capacity and
priority must be considered together. Gateway operation - Control the rate of material feeding the bottleneck. Drum - master schedule for the operation. Rope-
Schedules release of raw material into production at a pace that maintains the buffer, ensures the constraint is not “starved” for material, and that excessive
inventory does not build up. I-plant, where one raw material is used to make one final product. Processing is usually done in a straight line. A-plant, where
numerous subassemblies merge into a single final assembly. V-plant, where few raw materials can be made into several end products. T-plant, where multiple
straight lines can split into several assemblies. Operation Sequencing - a technique for short-term planning of actual jobs to be run in each work center based on
capacity. Item master- information on manufacturing lead time and lot size. work center master- efficiency and utilization of a work center. Dispatching-
selection and sequencing of available jobs to be run at individual workstations. Operation overlapping - moving work to the next operation as a batch is
completed.

Utilization = Hours actually worked / available hours * 100%

Efficiency = standard hours produced / hours actually worked *

Productivity = utilization * efficiency * 100%

Rated capacity = available time * utilization * efficiency

Total standard time = setup time + run time

Cumulative variance = previous cumulative variance + actual –

Planned backlog for period 1 = previous backlog + planned input -

CR = due date - present date / lead time remaining = actual time

Total production(BACKORDER / MADE TO STOCK) = Total forecast

Total production(BACKLOG / MADE TO ORDER) = total forecast +

PAB = prior period PAB or on hand balance + MPS - customer

Capacity = # of units that can be produced / $ that can be

Actual hours = standard hours / ( Efficiency * Utilization )

Net requirements = gross requirements - on-hand inventory -