The FAS is the actual build schedule in the MTO environment.

It represents the
final products which have been sold to the customers. This information
converted to dollars, gives an excellent measure of future cash flow.
In order to project future cash flow in a MTO company, you must be able to
convert the planned component purchase orders to the dollars of outflow to
purchase the components
In forecast management data omissions should never be accepted. The
original data should be obtained or a substitute should be entered
In the MPS for the forecast to be useful, it must be expressed in items,
quantities and dates
Delivery Cycle time is the actual time from receipt of the customer order to
the time of product shipment
Focus forecasting uses simulation to choose the forecasting method which
has worked best based on the past as the best indicator of the future
MAD and Standard Deviation: The standard deviation is more difficult to
calculate; MAD is capable of being updated conveniently with the use of
exponential smoothing; MAD is the expected forecast error for the next period
Production planning is a top management responsibility
Distribution Resource Planning uses planning logic similar to MRP which
allows the planning of inventory at warehouse locations. The lead times are
established for inventory movements between warehouses. Because the logic
uses time phasing, inventory management is more effective using DRP in a
warehouse network
FAS correspond to the MPS in a MTS environment and has to be completed at
the last moment possible
In DRP the lead time between warehouses is offset as the planned shipment to
the receiving warehouse. This logic is similar to the leadtime offset in an MRP
system where the planned order release is offset by the leadtime to purchase or
make the part
Case: MTO company with a short promise leadtime and long manufacturing
leadtimes
- The MPS is derived from a forecast on the long term horizon
- A mix of actual demand and forecast would generate requirements in the midterm horizon
- Actual customer demand would provide the requirements in the short-term
Synchronization to the production plan: changes in the master schedule
are communicated
Physical distribution includes customer order entry
RCCP provides mid to long range capacity planning in a high level. CRP provides
detailed work center planning
Range= Max-Min
Sales forecasts are generally inaccurate and are often used as an excuse for
manufacturing performance. However, the MPS is developed to produce the
production plan which senior management has agreed to. If the MPS is
developed realistically to an agreed to sales forecast, then the inaccurate
forecast does not contribute to an unrealistic MPS. Factor such inaccurate lead
times, inaccurate yields, and manufacturing optimism regarding capacity will
contribute to the MPS being unrealistic. As a consequence priorities will not be
valid.

When models change, there are many factors to consider to ensure inventory
unique to the old model is used up. At the same time, the components for the
new model need to be planned to ensure a smooth transition to the new model:
- accuracy of the forecast
- the cost of obtaining parts if demand exceeds forecast
- the probability of having leftover parts for the new model design
Forecasts are used only for what cannot be planned or calculated
Demand management integrates uncertain forecasts with certain order service
In a MRP closed loop system are included:
-MPS
-CRP
-Purchasing
-Production planning
-Shop floor control activities
-Financial systems
The top level DRP record should be closest to the customer side
Forecast horizon pushed further into the future:
-use of quarters, rather than months
- use of more forecasting periods
-involvement with a longer lead-time resource
Recurring or periodic data are not associated with long-range forecast
True demand: Original Quantity and requested shipping dates
Safety stock:
-covers errors in forecast
-MPS may not be achieved even if realistic
-buffer production from sales variation
Most useful in determining the production planning horizon is the capacity
acquisition timeframe
Historical analysis not included into Extrinsic forecasting model
The MRP is not used to drive the DRP Plan. Rather inputs from demand at the
warehouse level becomes input to MPS
Capacity utilization is calculated by dividing actual output by design capacity
Hedging:
- Uses safety lead time to protect against late deliveries
- Provides safety inventory in case option mixes are different than forecast
- Provides safety inventory in case volume is greater than forecast
The major advantage pf a 2 level MPS process is that products are planned as
the market place demands
ATP is not used in a MTS environment
Super bills are at the top level of the product structure/Modular bills are
managed the way the product is sold
Items which use critical resources must be master scheduled
Product-sales-inventory report represents either cumulative or perperiod data
The four step resource planning process:
- applies to resource planning and RCCP planning
-Calculates resource requirements
- Determine bill of resources for products or groups
In MTS environments, component assembly lead time is slushy and order
process and shipping lead-time is firm. In MTO and ATO, final assembly is firm
FAS usually based on a daily or shift rate
The production forecast represents the ATP at the group level multiplied by
the option percentage; it is used with the 2 levels master scheduling
Market share, customer share are measures of QUALITY