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Planning Sample
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Forecasting, Planning and SchedulingForecasting, Planning and Scheduling
http://http://www.managementsupport.comwww.managementsupport.com
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OutlineOutline
Forecasting Planning Scheduling MRP & ERP
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Strategy and Issues During a Product’s Strategy and Issues During a Product’s LifeLife
Introduction Growth Maturity Decline
Standardization
Less rapid product changes - more minor changes
Optimum capacity
Increasing stability of process
Long production runs
Product improvement and cost cutting
Little product differentiation
Cost minimization
Over capacity in the industry
Prune line to eliminate items not returning good margin
Reduce capacity
Forecasting critical
Product and process reliability
Competitive product improvements and options
Increase capacity
Shift toward product focused
Enhance distribution
Product design and development critical
Frequent product and process design changes
Short production runs
High production costs
Limited models
Attention to quality
Best period to increase market share
R&D product engineering critical
Practical to change price or quality image
Strengthen niche
Cost control critical
Poor time to change image, price, or quality
Competitive costs become critical
Defend market position
OM
Str
ateg
y/Is
sues
Com
pany
Str
ateg
y/Is
sues
HDTV
CD-ROM
Color copiers
Drive-thru restaurants Fax machines
Station wagons
Sales
3 1/2” Floppy disks
Internet
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Forecasting ApproachesForecasting Approaches
Used when situation is Used when situation is ‘stable’ & historical data exist‘stable’ & historical data exist Existing productsExisting products Current technologyCurrent technology
Involves mathematical Involves mathematical techniquestechniques e.g., forecasting sales of e.g., forecasting sales of
color televisionscolor televisions
Quantitative Methods Used when situation is vague Used when situation is vague
& little data exist& little data exist New productsNew products New technologyNew technology
Involves intuition, experienceInvolves intuition, experience e.g., forecasting sales on e.g., forecasting sales on
InternetInternet
Qualitative Methods
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Overview of Qualitative MethodsOverview of Qualitative Methods
Jury of executive opinionJury of executive opinion Pool opinions of high-level executives, sometimes augment Pool opinions of high-level executives, sometimes augment
by statistical modelsby statistical models Delphi methodDelphi method
Panel of experts, queried iterativelyPanel of experts, queried iteratively Sales force compositeSales force composite
Estimates from individual salespersons are reviewed for Estimates from individual salespersons are reviewed for reasonableness, then aggregated reasonableness, then aggregated
Consumer Market SurveyConsumer Market Survey Ask the customerAsk the customer
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Relationships of the Aggregate PlanRelationships of the Aggregate Plan
AggregatePlan for
Production
DemandForecasts,
orders
MasterProduction
Schedule, and MRP systems
Detailed WorkSchedules
ExternalCapacity
Subcontractors
Inventory OnHand
Raw MaterialsAvailable
Work Force
Marketplaceand Demand
Research andTechnology
ProductDecisions
ProcessPlanning & Capacity
Decisions
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Qualitative factorsQualitative factors Number and variety of jobsNumber and variety of jobs Complexity of jobsComplexity of jobs Nature of operationsNature of operations
Quantitative criteriaQuantitative criteria Average completion timeAverage completion time Utilization (% of time facility is used)Utilization (% of time facility is used) WIP inventory (average # jobs in system)WIP inventory (average # jobs in system) Customer waiting time (average lateness)Customer waiting time (average lateness)
Choosing a Scheduling MethodChoosing a Scheduling Method
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Priority Rules for Dispatching JobsPriority Rules for Dispatching Jobs
First come, first servedFirst come, first served The first job to arrive at a work center is processed firstThe first job to arrive at a work center is processed first Earliest due dateEarliest due date The job with the earliest due date is processed firstThe job with the earliest due date is processed first
Shortest processing timeShortest processing time The job with the shortest processing time is processed firstThe job with the shortest processing time is processed first
Longest processing timeLongest processing time The job with the longest processing time is processed firstThe job with the longest processing time is processed first Critical ratioCritical ratio The ratio of time remaining to required work time remaining is The ratio of time remaining to required work time remaining is
calculated, and jobs are scheduled in order of increasing ratio.calculated, and jobs are scheduled in order of increasing ratio.
FCFS
EDD
SPT
LPT
CR
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Inputs to theInputs to the Production Plan Production Plan
Aggregate Production Plan
MarketingCustomerDemand
EngineeringDesign
Completion
ManagementReturn on
InvestmentCapital
HumanResourcesManpowerPlanning
ProcurementSupplier
Performance
FinanceCash Flow
ProductionCapacityInventory
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Increased customer satisfaction due to meeting delivery Increased customer satisfaction due to meeting delivery schedules schedules
Faster response to market changesFaster response to market changes Improved labor & equipment utilizationImproved labor & equipment utilization Better inventory planning & schedulingBetter inventory planning & scheduling Reduced inventory levels without reduced customer Reduced inventory levels without reduced customer
serviceservice
MRP BenefitsMRP Benefits
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Distribution Resource PlanningDistribution Resource Planning
DRP requires:DRP requires: Gross requirements, which are the same as expected Gross requirements, which are the same as expected
demand or sales forecastsdemand or sales forecasts Minimum levels of inventory to meet customer Minimum levels of inventory to meet customer
service levelsservice levels Accurate lead timesAccurate lead times Definition of the distribution structureDefinition of the distribution structure
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