Introduction

Customer service plays a central role in achieving marketing

objectives for firms in the consumer goods industry. The most important
element of customer service is product availability. Commonly measured
as the fill rate for incoming orders, product availability depends on the
amount of end-item inventory in situations where a make-to-stock policy
exists. Manufacturing firms in the consumer goods industry adopt the
make-to-stock policy because the manufacturing lead-time for end-items
is often longer than the cycle time for taking and shipping an order.

The main tool to control product availability is the master

production schedule (MPS). By using the beginning inventory and the
sales forecast for a particular end item, a planner can calculate the
amount of production needed per period to meet anticipated customer
demand. This calculation becomes more complex in a multi-product
environment where forecast errors and capacity constraints can add a
great deal of uncertainty to the planning process. As firms continue to
integrate the MPS into logistical planning, it is becoming increasingly
clear that MPS stability plays a major role in managing the trade-off
between costs and product availability.

MASTER PRODUCTION
SCHEDULE
 A Master Production Schedule (MPS) is a plan for
production, staffing, inventory, etc. It is usually linked to
manufacturing where the plan indicates when and how much of
each product will be demanded. This plan quantifies significant
processes, parts, and other resources in order to optimize
production, to identify bottlenecks, and to anticipate needs and
completed goods. Since an MPS drives much factory activity, its
accuracy and viability dramatically affect profitability. Typical
MPS's are created by software with user tweaking.
Due to software limitations, but especially the intense work
required by the "master production schedulers", schedules do not
include every aspect of production, but only key elements that
have proven their control affectivity, such as forecast demand,
production costs, inventory costs, lead time, working hours,
capacity, inventory levels, available storage, and parts supply.
The choice of what to model varies among companies and
factories. The MPS is a statement of what the company expects to
produce and purchase (ie. quantity to be produced, staffing
levels, dates, available to promise, projected balance).
The MPS translates the business plan, including forecast
demand, into a production plan using planned orders in a true
multi-level optional component scheduling environment. Using
MPS helps avoid shortages, costly expediting, last minute
scheduling, and inefficient allocation of resources. Working with
MPS allows businesses to consolidate planned parts, produce
master schedules and forecasts for any level of the Bill of Material
(BOM) for any type of part.
The Master Production Scheduling (MPS) function has grown
from an MRP-driver to a management function which coordinates
Production and Sales and translates the company's long
term plans into detailed production decisions to control the
good show. Therefore each company, though often implicitly, has
an MPS function. The existing frameworks in literature however
are not always valid to model the MPS function in different types
of companies.
A Master Production Schedule or MPS is the plan that a company
has developed for production, inventory, staffing, etc. It sets the
quantity of each end item to be completed in each week of a
short-range planning horizon. A Master Production Schedule is the
master of all schedules. It is a plan for future production of end
items.
MPS INPUTS: MPS OUTPUT (production
Forecast Demand plan):
Amounts to be Produced
Production Costs
Staffing Levels
Inventory Costs
Quantity Available to Promise
Customer Orders
Projected Available Balance
Inventory Levels
Supply
Lot Size
Production Lead Time
Capacity

Features of master production

schedule
• Accepts and consolidates independent demand from
Manual Forecasts, Sales Forecasts, Customer Orders
and Electronic (EDI) Customer Releases.

• Allows extensive manipulation of draft master

schedules through menu features such as rolling,
netting, scrap factoring, and lot sizing.

• Provides Net Change analysis between two master

production schedules.

• Prints the Master Production Schedule in 12 day, 4

week, 12 week and 12 month formats.
• Provides rough-cut capacity planning to evaluate
feasibility of the Master Production Schedule in terms of
critical materials, manpower, machines and finances.

• Provides Sales Forecasting for one and five year

horizons.

• Forecasts demand using moving average, weighted

moving average, and exponential smoothing with
seasonal and economic trend adjustments.
• Prints Sales Forecasts in units or dollars.

• Generates a Master Production Schedule (MPS) file for

use by the MRP application.

• Maintains multiple shop calendars.

• Provides long horizons for capacity and resource

planning.
 How MASTER PRODUCTION
SCHEDULE works

By using several variables as inputs the MPS will generate a

set of outputs used for decision making. Inputs may include
forecast demand, production cost, inventory costs, customer
orders, inventory levels, supply, lot size, production lead time,
and capacity. Inputs may be automatically generated by an ERP
system that links a sales department with a production
department. For instance, when the sales department records a
sale, the forecast demand may be automatically shifted to meet
the new demand. Inputs may also be inputted manually from
forecasts that have also been calculated manually. Outputs may
include amounts to be produced, staffing levels, quantity
available to promise, and projected available balance. Outputs
may be used to create a Material Requirement Planning (MRP)
schedule.

A master production schedule may be necessary for

organizations to synchronize their operations and become more
efficient. An effective MPS ultimately will:

• Give production, planning, purchasing, and management the

information to plan and control manufacturing

• Tie overall business planning and forecasting to detail

operations

• Enable marketing to make legitimate delivery commitments

to warehouses and customers

• Increase the efficiency and accuracy of a company's

manufacturing.
Example of master production schedule:

MASTER PRODUCTION SCHEDULE

IN SALES AND PRODUCTION
The MPS serves the following functions:

1.POWERFUL SCHEDULING TOOL

Master scheduling requires ongoing analysis,

measurement and adjustment to achieve revenue goals
and ensure profitability through the careful allocation of
materials and resources. MPS gives you a set of
powerful tools for resource planning and scheduling,
analysis, and performance measurement.

2.PLANNER’S WORKBENCH

A Planner’s Workbench provides the means for

consolidating all planning and scheduling functions onto
one easy-to-use screen. The workbench gives you
immediate access to information in all areas necessary
for successful planning / scheduling including sales
demand, committed production, and purchased and
planned supply. This allows planners, analysts, and
program managers to react quickly and easily to any
exceptions that occur.

3.COMPLETE PLANNING VISIBILITY

To help resolve any conflicts, MPS takes a variety of

variables into account, including available inventory,
forecasted sales, actual backlog, and firm planned
production, among others.

4.“WHAT IF” SIMULATION

A “What If” simulation capability ensures the best

possible manufacturing scenario by allowing you to
analyze the effects of alternate scenarios, using either
current or simulated data.

5.SCHEDULING CYCLES

And because no single view of your supply and demand

data can satisfy all of your planning needs, MPS
enables you to create and maintain an unlimited number
of planning scenarios. One for near-term deliveries, another for
long-range production capacities, and so on.
Each cycle provides a unique view of the information
Necessary to help you develop the correct priorities for
your factory.

6.PERFORMANCE MEASUREMENT

MPS can give you an on-line “snapshot” estimation of

the profit or loss that your build plan will yield.
Performance analysis can be based on current or
simulated data. This helps you focus on areas of
maximum payback and set priorities before committing
critical resources.