Question 3

Question 1

The Master Production Schedule (MPS)

Answer 1

• The formal link between production planning and actual production
• The basis for the calculation of resources needed
• The driving force behind the material requirements plan
• The primary priority plan for manufacturing (low-level codes)
• This scheduling is usually done in 2 steps: 1) preliminary MPS and 2) finalised MPS

Question 2

Inputs to the MPS

Answer 2

• Production Plan data (Aggregate Plan input)
• Forecasts at a more detailed level than were required for the PPL (before: product families, now:end items)
• Actual customer orders – takes priority over forecasted demand
• Inventory levels – Projected available balance (PAB)
• Capacity constraints – as per the Rough-cut capacity plan

Question 3

Objectives of the MPS

Answer 3

• Maintain good customer service
• Make effective use of resources
• Maintain effective levels of inventory

Question 4

Steps in developing the MPS

Answer 4

• Developing a preliminary MPS
• Checking MPS against capacity and resources (rough-cut capacity plan)
• Reconciling any differences

Question 5

Connection between MPS and MRP

Answer 5

Information from MPS will be transferred to MRP as gross requirements where individual parts gets exploded and offset as per lead times and product tree

Question 6

Netting

Answer 6

Calculating net requirements of materials by considering the gross requirements, on-hand inventory and scheduled receipts

Question 7

Exploding

Answer 7

Breaking down the production requirements of an item into its components to determine the quantities of these

Question 8

Offsetting

Answer 8

The process of placing the exploded requirements in their proper periods based on lead time

When a planned order receipt in one time period requires the release of that order in an earlier time period based on the lead time for the item

Question 9

The Material Requirements Planning (MRP)

Answer 9

• Determine requirements - calculated to meet product requirements defined in the MPS:
  o What to order?
  o How much to order?
  o When to order?
  o When to schedule delivery?
• Keep priorities current - reorganise priorities to keep plans current (add and delete, expedite, delay, and change orders)

Independent- and dependent demand:
* The parent is independent demand based on forecasts
* The components are dependent demand which are calculated, since these depend on how many of the parents are forecasted

Question 10

Inputs to the MRP

Answer 10

• Master Production Schedule quantities and timing
• Bill of materials for MPS items
• Inventory records of all items to be planned
• Planning factors such as lead times, order quantities, and safety stock
• Current status of each item
• Capacity constraints - as per the Capacity requirements planning (CRP)

Question 11

Forecasting in relation to the MPC

Answer 11

Independent demand (forecasted):
- BUS: Qualitative based on personal insight, market survey, historical analogy, and Delphi method.
- PPL: Extrinsic quantitative - external indicators and causal factors
- MPS: Intrinsic quantitative - internal indicators and historical data

Dependent demand (calculated): MRP

Question 12

Procurement

Answer 12

The over-arching concept/terminology for the company culture and values regarding spend. It sets the governance and guidelines for how the comapny source and purchase

The end-to-end perspective on purchasing/sourcing, including rules, organising, portfolio management, stakeholder management and relations, as well as linking to corporate strategy and agendas

Question 13

Sourcing

Answer 13

Relational

Focus: establishing and maintaining fruitful and constructive long-term relationships with qualified vendors/suppliers

Question 14

Purchasing

Answer 14

Transactional

Focus: only on the purchasing transactions rather than supplier relationships

Question 15

Linear Procurement Process

Answer 15

Internal customer
Individuals/departments within the organisation

Determining specification
Determining the procurement needs – Quality and quantity specifications

Selecting supplier
Set up supplier criteria and routines to select the best suppliers

Contracting
Decided what type of contract to issue (long-term vs. short-term). Issue the contract

Ordering
Place the order - PO and order follow up

Expediting and evaluation
Follow-up on PO - monitorisation and communication with the supplier to secure supply and ensure on-time delivery, and control of compliance with agreements
Assess the received goods or services

Follow-up and evaluation
Ensure proper payment and review supplier performance

Supplier