Production Management - Master Production Plan.pdf

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PRODUCTION MANAGEMENT Master Production Plan (MPP)
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MPP What is It? It is a “delivery plan” for the manufacturing organization. It includes: Amounts of each product to be produced Delivery times for each product. It is subject to: Demand forecast. Actual orders. Production constraints. Inventory levels.
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Creating a MPP 1. Evaluate the inventory levels and demand (forecasted & actual) to determine when to produce. 𝐼 𝑡 = 𝐼 𝑡−1 + 𝑄 𝑡 − ?𝑎? ? 𝑡 , 𝑂 𝑡 𝐼 𝑡 = Inventory level at the end of time period t 𝑄 𝑡 = Amount to be produced during time period t ? 𝑡 = Forecasted demand for time period t 𝑂 𝑡 = Actual demand / orders for time period t 2. Define your production strategy (i.e. fixed batch, batch to cover demand forecast, etc.) 3. Define the amount to be produced in time period t
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Creating a MPP Fixed Batch Product A Initial Inventory Week 1,600 1 2 3 4 5 6 7 8 Forecast 1,000 1,000 1,000 1,000 2,000 2,000 2,000 2,000 Orders 1,200 800 300 200 100 0 0 0 Fixed Batch = 2,500 when 𝐼 𝑡 = 0 Week 1: 𝐼 1
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