Summary Master Production Scheduling / Mustika Ratnawati Faizzah - 02411950035002

based on J.R. Tony Arnold, Robert Jacob, anda Chopra S. books

A stable master production schedule translates into stable component schedules, which mean improved
performance in plant operations. Too many changes in the MPS are costly in terms of reduced productivity.
However, too few changes can lead to poor customer service levels and increased inventory. The objective is
to strike a balance where stability is monitored and managed.
The projected available balance (PAB) is calculated in one of two ways, depending on whether the
period is before or after the demand time fence. The demand time fence is the number of periods, beginning
with period 1, in which changes are not excepted due to excessive cost caused by schedule disruption. For
periods before the demand time fence it is calculated as:
PAB = prior period PAB or on-hand balance + MPS - customer orders
This process ignores the forecast and assumes the only effect will be from the customer orders. Any new
orders will have to be approved by senior management. For periods after the demand time fence, forecast will
influence the PAB so it is calculated using the greater of the forecast or customer orders.

The zones and time fences are as follows:

• Frozen zone. Capacity and materials are committed to specific orders. Since changes would result in
excessive costs, reduced manufacturing efficiency, and poor customer service, senior management’s approval
is usually required to make changes. The extent of the frozen zone is defined by the demand time fence. Within
the demand time fence, demand is usually based on customer orders, not forecast.
• Slushy zone. Capacity and material are committed to less extent. This is an area for trade-offs that must be
negotiated between marketing and manufacturing. Materials have been ordered and capacity established; these
are difficult to change. However, changes in priorities are easier to change. The extent of the slushy zone is
defined by the planning time fence. Within this time fence the computer will not reschedule MPS orders.
• Liquid zone. Any change can be made to the MPS as long as it is within the limits set by the production plan.
Changes are routine and are often made by the computer program. Changes to the MPS will occur. They must
be managed and decisions made with full knowledge of the costs involved.
The first eight weeks in the MPS as frozen. This means no
changes inside of eight weeks are possible. In reality, “no” may be a
bit extreme. If the president dictates a change, it will probably
happen, but such occurrences should be rare. Many firms do not like
to use the term frozen, saying that anything is negotiable—but
negotiations get tougher as we approach the present time. However,
a frozen period provides a stable target for manufacturing to hit. It
also removesmost alibis for missing the schedule! Time fencing is an
extension of the freeze concept. Many firms set time fences
thatspecify periods in which various types of change can be handled. A common practice, for example, is to
have three time fences, say 8, 16, and 24 weeks. The marketinglogistics people could make any changes that
they wanted beyond the 24-week fence as long as the sum of all MPS records is synchronized with the
production plan. From weeks 16 to 24, substitutions of one end item for another would be permitted, provided
required parts would be available and the production plan was not violated. From weeks 8 to 16, the MPS is
quite rigid; but minor changes within the model series can be made if component parts are available. The
period before 8 weeks is basically a freeze period, but occasional changes are made even within this period.
To achieve the productivity necessary to remain competitive, stability in short-range manufacturing plans is
essential. Two common fences are the demand fence and the planning fence. The demand fence is the shorter
of the two. Inside the demand fence, the forecast is ignored in calculating the projected available balance. The
theory is that customer orders—not the forecast—matter in the near term. The planning fence indicates the
time at which the master production scheduler should be planning more MPS quantities. Within the demand
fence it is very difficult to change the MPS. Between the demand fence and the planning fence, management
trade-offs must be made to make changes; outside the planning fence, changes can be made by the master
production scheduler.