Name: Imam Mukhri

NIM: 12522276
Class: IP
Production Planning & Inventory Control
1. What is description about time horizon with manufacturing resource planning
system?
Plans can be long, medium, or short range depending on the time required to complete
the execution. The time spans of these different ranges depend on the operational
environment organization. The long-range planning horizon should exceed the time
required to acquire ne facilities and equipment. This may require 10 years or longer
for organization involved in the extraction process where new mines must be
developed. It may be as short as 18 months for the machine shop where facilities and
equipment are catalog items.
Medium-range planning is the development of the aggregate production rates and
aggregate levels of inventory for product groups within the constraints of given
facility. Expansion of capacity within the medium-range planning period is limited to
increasing personnel or shifts, scheduling overtime, acquiring more efficient tooling,
subcontracting, and perhaps adding some types of equipment that can be obtained on
short notice.
Medium-range planning usually covers a period beginning 1 to 2 months in the future
and ending 12 to 18 months in the future. Its exact boundaries depend on the time
constraints for changing levels of production in a particular situation. The planning
horizon for medium-range planning is usually at least as long as the longest product
lead time. In this context, we define lead time as the time from recognizing that an
order for material must be placed until that material is present in a finished good. If
medium-term planning uses a horizon shorter than this, material planning cannot
properly be performed.
There is no precise definition for the length of the short-term planning horizon.
Although detailed schedules and assignments of men and machines to tasks usually do
not occur until well within the short-range period, the development of the production

schedule frequently bridges the medium and short-range planning periods. Planning is
continuous activity, and refinement of medium-range forecasts and plans to the detail
required in preparing the first draft of a short-range version of the production schedule
may take place gradually over a number of weeks.

Long-Range Planning
Long-range planning activities includes business forecasting, product and sales
planning, production planning, resource requirements planning, and financial
planning. These activities are interdependent; we must establish that each is feasible
and that all compatible.

Business Forecasting

Business forecasting evaluates political, economic, demographic, technological, and

competitive factors that will affect the demand for a firms products. Top management
responsible for this activity. It is not unusual to have a long-range planning task force
reporting directly to the chief executive officer and also to employ external
forecasting consultants. Business forecast are aggregated into large product families.

Product and sales planning

Production planning uses the forecast from product and sales planning to plan the
aggregate rates of production. In production planning, outputs are specified in the
broadest term possible: tons, barrels, yards, dollars, or standard hours of production.
The specificity of product line required at this level depends on the equipment
required to manufacture it.

Resource Requirements Planning

Long-range planning is a complex matter. Products, sales, and production planning

should interact with resource requirements planning. Decision concerning products,
sales, and output levels should be consistent with planning for facility, equipment, and
human resource.

Financial Planning

Product, sales, and production plans frequently require additional resources that in
turn require financing. Normal operation requires working capital, and sales generate
income. The financial capability of the organization to carry out the long-range plans
should be verified.

Medium-Range Planning

Master Production Schedule (MPS)

The MPS is time-phased plan of the items and the quantity of each that the
organization intends to build. It is a commitment to meet marketing requirements
and to use production capacity. The MPS should be approved by purchasing,
production, marketing, and top management.
The MPS covers anything from the present to 1 to 18 months or more in the
future. It is used as both a short-range and medium-range planning device. The
MPS should be consistent with the production plan. It drives the short-range
planning system by providing the input to material requirements planning.

Rough Cut Capacity Planning (RCCP)

Before management approves the production plan or the MPS, it must verify the
organizations ability to carry out the plan. Rough cut planning includes the
following:
1. Determining the sufficient working capital will be available to meet the
cash flow requirements.
2. Verifying that production facilities and equipment have adequate capacity.
3. Determining that key vendors have the required capacity and obtaining
commitment of that capacity.
If sufficient capacity is not available and cannot be obtained within the planning
horizon, the MPS must be altered to fall within capacity constraints.

Material Requirements Planning (MRP)

Time-phased MRP begins with the items listed on the MPS and determines (1) the
quantity of all components and material required to fabricate those item and (2)
the date that the components and materials are required.
Time-phased MRP is accomplished by exploding the bill of materials and
offsetting requirements by the appropriate lead times.

Capacity Requirements Planning (CRP)

The time-phased requirements obtained from MRP are used in conjunction with
other data to determine the capacity required to manufacturing the item specified
in the MRP. These capacity requirements are compared to available capacity.
Corrective action is taken if necessary. Corrective actions include adding
overtime, rerouting production, and subcontracting some work.

Short-Range Planning
Short-range planning and control involve both priorities (i.e., determining and
meeting due dates) and capacities.

2. Explain about make to stock, make to order, engineering to order, and assembly
to order?
Make-to-Stock
The positioning strategy of make-to-stock emphasizes immediate delivery of good
quality, reasonably priced, off-the-shelf, standard items. In this environment a
customer is not willing to tolerate a delay in receiving the product.

Assemble-to-order

Although some products are packaged or finished to order rather than assembled,
for convenience, we will refer to this environment as assemble-to-order. The
positioning strategy of assemble-to-order is to supply a large variety of high
quality, competitively priced, final products from standard components and
subassemblies within a short assembly lead time.

Make- or Engineer-to-order

The positioning strategy of make-to-order is to provide the technical ability to

produce specialty products, such as machine tools. In many situation the final
design of the item is part of what is purchased. The final product is usually a
combination of standard components and other components costum designed for
the customer.