Dis Aggregation

8/13/2019 Dis Aggregation

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Disaggregation

Working with aggregate units facilitates intermediate planning.

But to put this plan into action we should translate it,

decompose it, disaggregate itand state it in terms of actual units

of products and for a shorter period

Aggregate planning was for12or more months.Now we should break it down into shorter periods, say 2-3 months.

Disaggregation:

Breaking down the aggregate plan into specific products - fromaggregate product to real specific products - based on the

specific products, then calculating detail of manpower,

material and inventory requirements.


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Disaggregation

Aggregate Plan

Month Jan Feb MarLawn Mower 200 300 400

Master Schedule

Push 100 100 100Self-propelled 75 150 200

Riding 25 50 100

Total 200 300 400Total of aggregate and

disaggregate products are not

necessarily equal


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Master Schedule

The result of disaggregationis a master schedule.

The Master Schedule shows quantity and timingof specific products.

It usually covers 6 to 12 weeks.

After preparing a tentative Master Schedule, a planner can do Rough-cut

Capacity Planning.

Rough-cut capacity planningis to check the feasibility of the Master

Schedule with respect to available manpowerand machinerycapacities,

storagespaces, and vendorcapabilities.

It is just a rough check to ensure that the master schedule is achievable.

The master schedule then is used as the basis for short term planning.


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Master Schedule

Aggregate plan: 12 months.

Master schedule: 12 weeks.

Master schedule is updated every 2 weeks.

Therefore, it is on a rolling basis, always we

have a disaggregated plan for the next 12weeks.


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Master Production Schedule (MPS)

Master schedulestates quantityand delivery timeof

specific products.

It says we need 75 push lawnmowers in January. But it does

not say how we get it - from production,or from inventory.

MasterProductionSchedule(MPS)is developed

based on Master Schedule.

MPS: Quantity and timing of planned production.

MPS determines the Promised Inventory, and the

Production Requirements availableto promise inventoryfor

each period.


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Master

scheduling

Beginning inventory

Forecast

Customer orders

Inputs Outputs

Projected inventory

Master production schedule

Uncommitted inventory

(Available to Promise)

Master Scheduling Process

The key idea is: we have a forecast, but it turns into and actualorder when we receive a customer order.

MPS starts with a preliminary calculation of projected inventory.

This reveals when we need production to get additional inventory.


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64 1 2 3 4 5 6 7 8

Forecast 30 30 30 30 40 40 40 40

Customer Orders

(committed) 33 20 10 4 2

Projected on-hand

inventory 31 1 -29

JUNE JULY

Beginning

Inventory

Customer orders are

larger than forecast in

week 1

Forecast is larger than

Customer orders in week 2

Forecast is larger than

Customer orders in week 3

Example; Projected on-hand Inventory


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Example; Projected on-hand Inventory

64 June July

1 2 3 4 5 6 7 8

Forecast 30 30 30 30 40 40 40 40

Customer Orders

(committed)33 20 10 4 2

Projected onhand inventory

31 1 41 11 41 1 31 61

MPS 70 70 70 70


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Available To Promise (ATP)

Now we can determine available to promiseat each period.

We use a look ahead procedure.

Sum booked customer orders week by week up to (not including)

the next week of production. This is booked orders.

The remaining inventory is ATP.

ATP is only calculated for the first week and for weeks in which

there is a MPS quantity. (In this example: weeks 1, 3, 5, 7, 8)

64 June July

1 2 3 4 5 6 7 8

Forecast 30 30 30 30 40 40 40 40

Customer Orders (committed) 33 20 10 4 2

Projected on hand inventory 31 1 41 11 41 1 31 61

MPS 70 70 70 70


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Available To Promise (ATP); First week

Available to promise in week 1 = Inventory in week 0 + Production

in week 1 - Customer Orders at week 1 - Customer Orders at week 2

ATP(1) = I(0)+ P(1) - CO(1) - CO(2)ATP(1) = 64+0 -33 -20= 11

This is an uncommitted inventory.

It can be assigned to week 1, week 2, or both.

64 June July

1 2 3 4 5 6 7 8

Forecast 30 30 30 30 40 40 40 40



MPS 70 70 70 70

ATP 11 56 68 70 70


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Available To Promise (ATP); Other weeks

For other weeks, beginning inventory is removed from the formula:

ATP(3) = P(3)-CO(3)-CO(4)

ATP(3)= 70-10-4= 56

64 June July

1 2 3 4 5 6 7 8

Forecast 30 30 30 30 40 40 40 40


Projected on hand inventory 31 1 41 11 41 1 31 61MPS 70 70 70 70

ATP 11 56 68 70 70

64 June July1 2 3 4 5 6 7 8

Forecast 30 30 30 30 40 40 40 40



MPS 70 70 70 70

ATP 11 56 68 70 70

For weeks 7 and 8, no CO, therefore ATP = MPS


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Updating ATP

As additional orders are booked, they would be entered into the

schedule.

ATP would be updated to reflect new booked orders.

Marketing can use updated ATP amounts to provide realistic

delivery dates to customers


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Updating MPS

Changing to a master production schedule can be disruptive.

Particularly changes in the immediate periods of the schedule

Aggregate Plan is developed for say 1 year

Master Production Schedule is developed for a period of say 12

weeks.

MPS is updated say every 2 weeks, it is on a rolling basis.

Frozen Firm Full Open

1 2 3 4 5 6 7 8 9 10 11 12


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Problem 1. Book Page 627.

Forecast of demand for the next four months is 70 units permonth

Committed customer orders for the next four months are 80,50, 30, and 10, respectively. Order size is 100 units.Beginning inventory is 0.

Prepare MPS

Prepare ATP

Assignment


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Solution to Problem 1

1 2 3 4Forecast 70 70 70 70

Customer Orders 80 50 30 10

Inventory on hand 20

MPS 100

ATP

Month

1 2 3 4

Forecast 70 70 70 70


Inventory on hand 20 50MPS 100 100

ATP

Month


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1 2 3 4



Inventory on hand 20 50 80

MPS 100 100 100

ATP

Month

1 2 3 4


Customer Orders 80 50 30 10Inventory on hand 20 50 80 10

MPS 100 100 100

ATP

Month


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1 2 3 4

Forecast 70 70 70 70Customer Orders 80 50 30 10

Inventory on hand 20 50 80 10

MPS 100 100 100ATP 20

Month

1 2 3 4




MPS 100 100 100

ATP 20 50

Month

1 2 3 4




MPS 100 100 100ATP 20 50 60

Month

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Dis Aggregation