OPS 405 Week 3 Building the Master Schedule Example

Two Hundred Boom Cylinders Every Other Week: Building a Master Production Schedule With Time Fences and Available-to-Promise

[Student Name]

University of Phoenix

OPS/405: Enterprise Resource Management

Week 3 Assignment

[Instructor Name]

[Date]

Saginaw Valley Fluid Power, its models, orders and quantities are composites written for a model paper.

Week 2 set Saginaw Valley Fluid Power's aggregate plan by product family through a monthly sales and operations planning cycle. The plan says how many large welded cylinders the composite Saginaw, Michigan, plant should build each quarter; it does not say which of the roughly 300 large welded models to build in which week, or what delivery date to promise a customer who calls today. That is the job of the master production schedule. This paper builds one.

The Master Schedule's Role

The master production schedule states which end items will be produced, in what quantities and in which weeks. It sits between the sales and operations plan, which it must add up to, and material requirements planning, which uses it to calculate parts and materials. It also gives sales a basis for promising dates. Vollmann et al. (2005) described the master schedule as the anticipated build schedule that disaggregates the production plan into specific products and serves as the main input to detailed material and capacity planning.

From Family to Models

The second-quarter plan for large welded cylinders is about 15,000 units. The master scheduler divides it among models in two ways. Build-to-order models, about 80 percent of the family, are scheduled from customers' releases and forecasts. Build-to-stock models for distributors are scheduled to keep target inventories of about four weeks' supply.

A Weekly Schedule for One Model

The BC-4520 boom cylinder goes to a tractor builder. On hand at the start: 120. Forecast: 80 a week. Booked customer orders: week 1, 95; week 2, 88; week 3, 70; week 4, 60; week 5, 40; week 6, 20; nothing booked after that. Production lot: 200, which balances setup of the welding fixture against inventory. The rule for demand in each week is the larger of forecast and booked orders.

Projected available balance, week by week: week 1, 120 minus 95 = 25. Week 2, 25 minus 88 would be negative, so a lot of 200 is scheduled: 25 plus 200 minus 88 = 137. Week 3, 137 minus 80 = 57. Week 4, 57 minus 80 would be negative, so a lot is scheduled: 57 plus 200 minus 80 = 177. Week 5, 177 minus 80 = 97. Week 6, 97 minus 80 = 17. Week 7, 17 minus 80 would be negative: a lot is scheduled, giving 137. Week 8, 137 minus 80 = 57. The schedule settles into lots of 200 roughly every other week.

Projected balance tells the shop what will be on the shelf; available-to-promise tells sales what is still free to sell.

Available-to-Promise

Available-to-promise uses only booked orders, not forecasts. In week 1, on-hand stock of 120 minus orders until the next lot arrives, 95, leaves 25. In week 2, the lot of 200 minus orders in weeks 2 and 3, 88 and 70, leaves 42. In week 4, the lot of 200 minus orders in weeks 4 through 6, 60, 40 and 20, leaves 80. In week 7, the lot of 200 is entirely uncommitted. If the tractor builder calls asking for 60 more cylinders in week 3, sales can promise 42 from the week 2 lot and must offer the other 18 from week 4. Sales sees these figures on its screen and quotes from them rather than guessing.

Time Fences

Sridharan et al. (1987) studied freezing the master schedule under rolling planning and showed that freezing part of the horizon reduces schedule instability, with a trade-off against responsiveness and cost. Saginaw Valley sets three zones. Weeks 1 to 4 are frozen: changes only with the plant manager's approval, since material has been ordered and welding is sequenced. Weeks 5 to 12 are slushy: the master scheduler may change quantities within 15 percent if material is available. Beyond week 12 is liquid: changes flow freely from the S&OP plan and customer releases.

Kadipasaoglu and Sridharan (1995) compared ways to reduce schedule instability in multistage manufacturing under uncertain demand and found that freezing the schedule was among the effective approaches, alongside holding safety stock. The time fences, combined with the four-week stock target for distributor models, apply both.

Rough-Cut Capacity Check

The bottleneck for large welded cylinders is a cell of four welding robots, with about 300 robot-hours a week after maintenance. Each large cylinder needs about 0.18 robot-hours on average. The second-quarter plan of 15,000 units over 13 weeks averages about 1,150 a week, about 207 robot-hours, within capacity, but weeks with two large lots of high-volume models peak near 290 hours. The scheduler staggers lots of the largest models into alternate weeks so no week exceeds the cell's capacity.

Build-to-Stock Models

Distributor models are scheduled differently. For a common tie-rod cylinder sold through 140 distributors, there are no booked orders far ahead, only daily replenishment. The scheduler sets a target of four weeks of stock based on the forecast and schedules a lot whenever projected inventory would drop below two weeks. Available-to-promise is simply stock on hand plus scheduled lots, since distributor orders are filled from the shelf. Because these models share the welding robots with build-to-order work, their lots are placed in weeks with spare robot hours, which the rough-cut check identifies.

When Customers Change Their Minds

The tractor builder revises its releases every week, sometimes cutting a week's quantity and adding to another. Inside the frozen zone, the master scheduler first checks whether finished stock can absorb the change; if not, the change waits for the plant manager's approval, who weighs the customer's importance against the disruption. Outside the frozen zone, changes go into the next weekly run.

Maintaining the Schedule

Each Monday the master scheduler loads new customer releases, recalculates projected balances and available-to-promise, reviews exceptions such as negative balances inside the frozen zone and publishes the schedule. Changes inside the frozen zone are logged with a reason, and their count is reported at the monthly S&OP meeting as a measure of schedule stability.

Conclusion

The master schedule converts Saginaw Valley's family plan into weekly model quantities. For the BC-4520, lots of 200 roughly every other week keep projected balances positive, and available-to-promise tells sales exactly what it can commit without disturbing existing orders. Time fences protect the near-term schedule, a rough-cut check confirms the welding robots can support it and weekly maintenance keeps it current, setting up the material and capacity planning of Week 4.

References

Kadipasaoglu, S. N., & Sridharan, V. (1995). Alternative approaches for reducing schedule instability in multistage manufacturing under demand uncertainty. Journal of Operations Management, 13(3), 193-211. https://doi.org/10.1016/0272-6963(95)00023-L

Sridharan, V., Berry, W. L., & Udayabhanu, V. (1987). Freezing the master production schedule under rolling planning horizons. Management Science, 33(9), 1137-1149. https://doi.org/10.1287/mnsc.33.9.1137

Vollmann, T. E., Berry, W. L., Whybark, D. C., & Jacobs, F. R. (2005). Manufacturing planning and control for supply chain management (5th ed.). McGraw-Hill/Irwin.