SUPPLEMENT

Master Production
Scheduling

Learning Goals
After reading this supplement, you will be able to . . .
1. discuss the importance of the master production schedule (MPS) and the nature
of the information that can be derived from it.
2. develop an MPS in a make-to-stock environment.
3. compute available-to-promise quantities for end items.

he master production schedule (MPS) is a link between the firm’s broad

T strategies and tactical plans that enables the firm to achieve its goals. The MPS
provides essential information for functional areas such as operations, marketing, and
finance. In this supplement, we discuss the master production scheduling process, the
need for functional coordination, the way to develop an MPS, the information that an
MPS provides to assist in negotiating delivery dates, and the managerial considerations
for establishing and stabilizing the MPS.

MASTER PRODUCTION SCHEDULING PROCESS

Figure F.1 shows the master production scheduling process. Operations must first cre-
ate a prospective MPS to test whether it meets the schedule with the resources (e.g.,
machine capacities, labor, overtime, and subcontractors) provided for in the aggre-
gate production plan. Operations revises the MPS until it obtains a schedule that sat-
isfies all resource limitations or determines that no feasible schedule can be devel-
oped. In the latter event, the production plan must be revised to adjust production
requirements or increase authorized resources. Once a feasible prospective MPS has
been accepted by plant management, operations uses the authorized MPS as input to
material requirements planning. Operations can then determine specific schedules for
component production and assembly. Actual performance data such as inventory lev-
els and shortages are inputs to the next prospective MPS, and the master production
scheduling process is repeated.
F.2 Supplement F . Master Production Scheduling

FIGURE F.1
Master Production
Scheduling Process
Authorized Prospective master No
production production Are resources
plan schedule available?

Yes

Material Authorized master

requirements production
planning schedule

FUNCTIONAL INTERFACES
Operations needs information from other functional areas to develop an MPS that
achieves production plan objectives and organizational goals. Although master pro-
duction schedules are continually subject to revision, changes should be made with a
full understanding of their consequences. Often, changes to the MPS require additional
resources, as in the case of an increase in the order quantity of a product. Many com-
panies face this situation frequently, and the problem is amplified when an important
customer is involved. Unless more resources are authorized for the product, less
resources will be available for other products, putting their schedules in jeopardy. Some
companies require the vice-presidents of marketing and manufacturing jointly to
authorize significant MPS changes to ensure mutual resolution of such issues.
Other functional areas can use the MPS for routine planning. Finance uses the MPS
to estimate budgets and cash flows. Marketing can use it to project the impact of prod-
uct mix changes on the firm’s ability to satisfy customer demand and manage delivery
schedules. Manufacturing can use it to estimate the effects of MPS changes on loads at
critical workstations. Personal computers, with their excellent graphic capabilities, give
managers access to many MPS-related reports in readable and useful formats. PC pro-
grams allow managers to ask “what-if” questions about the effects of changes to the
MPS.

DEVELOPING A MASTER PRODUCTION SCHEDULE

The process of developing a master production schedule includes (1) calculating the
projected on-hand inventory and (2) determining the timing and size of the production
quantities of specific products. We use the manufacturer of the ladder-back chair (see
Chapter 16, “Resource Planning”) to illustrate the process. For simplicity, we assume
that the firm does not utilize safety stocks for end items, even though many firms do. In
addition, we use weeks as our planning periods, even though hours, days, or months
could be used.
Step 1. Calculate Projected On-Hand Inventories. The first step is to calculate the
projected on-hand inventory, which is an estimate of the amount of inventory avail-
able each week after demand has been satisfied:
 Developing a Master Production Schedule F.3

       
Projected on-hand On-hand MPS quantity Projected
inventory at the end  inventory at the  due at the start  requirements
of this week end of last week of this week this week

This calculation is similar to that for the projected on-hand inventory in an MRP
record and serves essentially the same purpose (see Chapter 16, “Resource Planning”).
In some weeks, there may be no MPS quantity for a product because sufficient
inventory already exists. For the projected requirements for this week, the scheduler
uses whichever is larger—the forecast or the customer orders booked—recognizing
that the forecast is subject to error. If actual booked orders exceed the forecast, the
projection will be more accurate if the scheduler uses the booked orders because
booked orders are a known quantity. Conversely, if the forecast exceeds booked
orders for a week, the forecast will provide a better estimate of requirements for that
week because some orders are yet to come in.
The manufacturer of the ladder-back chair produces the chair to stock and needs
to develop an MPS for it. Marketing has forecasted a demand of 30 chairs for the
first week of April, but actual customer orders booked are for 38 chairs. The current
on-hand inventory is 55 chairs. No MPS quantity is due in week 1. Figure F.2 shows
an MPS record with these quantities listed. As actual orders for week 1 are greater
than the forecast, the scheduler uses that figure for actual orders in calculating the
projected inventory balance at the end of week 1:

     
55 chairs 38 chairs already
MPS quantity
Inventory  currently   promised for  17 chairs
(0 for week 1)
in stock delivery in week 1

FIGURE F.2
Item: Ladder-back chair
Master Production
Schedule for Weeks
1 and 2 April
Quantity
55 1 2
on Hand:

Forecast 30 30

Explanation:
Customer Forecast is less than booked
orders 38 27 orders in week 1; projected
(booked) on-hand inventory
balance = 55 + 0 – 38 = 17.
Projected
on-hand 17 –13
inventory
Explanation:
Forecast exceeds booked orders
MPS quantity 0 0 in week 2; projected on-hand
inventory balance = 17 + 0 – 30
= –13. The shortage signals
a need to schedule an MPS
MPS start quantity for completion in week 2.
F.4 Supplement F . Master Production Scheduling

In week 2, the forecasted quantity exceeds actual orders booked, so the projected
on-hand inventory for the end of week 2 is 17  0  30  13. The shortage signals
the need for more chairs in week 2.
Step 2. Determine the Timing and Size of MPS Quantities. The goal of determining
the timing and size of MPS quantities is to maintain a nonnegative projected on-hand
inventory balance. As shortages in inventory are detected, MPS quantities should be
scheduled to cover them, much as planned receipts are scheduled in an MRP record
(see Chapter 16, “Resource Planning”). The first MPS quantity should be scheduled
for the week when the projected on-hand inventory reflects a shortage, such as week
2 in Figure F.2.1 The scheduler adds the MPS quantity to the projected on-hand inven-
tory and searches for the next period when a shortage occurs. This shortage signals a
need for a second MPS quantity, and so on.
Figure F.3 shows a master production schedule for the ladder-back chair for the next
eight weeks. The order policy requires production lot sizes of 150 units, which is the
same as FOQ  150 (see Chapter 16, “Resource Planning”). A shortage of 13 chairs
in week 2 will occur unless the scheduler provides for an MPS quantity for that period.

FIGURE F.3
Item: Ladder-back chair Order Policy: 150 units
Master Production
Lead Time: 1 week
Schedule for Weeks 1–8
April May
Quantity
55 1 2 3 4 5 6 7 8
on Hand:

Forecast 30 30 30 30 35 35 35 35

Customer
orders 38 27 24 8 0 0 0 0
(booked)

Projected
on-hand 17 137 107 77 42 7 122 87
inventory

MPS quantity 0 150 0 0 0 0 150 0

MPS start 150 0 0 0 0 150 0 0

Explanation: Explanation:
The time needed to assemble On-hand inventory balance
150 chairs is one week. = 17 + 150 – 30 = 137. The
The assembly department must MPS quantity is needed
start assembling chairs in week 1 to avoid a shortage of 30 – 17 = 13
to have them ready by week 2. chairs in week 2.

1 Insome cases, new orders will be planned before a shortage is encountered. Two such instances are building safety stocks
and building anticipation inventories.
 Available-to-Promise Quantities F.5

Once the MPS quantity is scheduled, the updated projected inventory balance for
week 2 is

     
17 chairs in
MPS quantity Forecast of
Inventory  inventory at the    137 chairs
of 150 chairs 30 chairs
end of week 1

The scheduler proceeds column by column through the MPS record until reaching the
end, filling in the MPS quantities as needed to avoid shortages. The 137 units will sat-
isfy forecasted demands until week 7, when the inventory shortage in the absence of
an MPS quantity is 7  0  35  28. This shortage signals the need for another
MPS quantity of 150 units. The updated inventory balance is 7  150  35  122
chairs for week 7.
The last row in Figure F.3 indicates the periods in which production of the MPS
quantities must begin so that they will be available when indicated in the MPS quan-
tity row. This row is analogous to the planned order receipt row in an MRP record
(see Chapter 16, “Resource Planning”). In the upper-right portion of the MPS record,
a lead time of one week is indicated for the ladder-back chair; that is, one week is
needed to assemble 150 ladder-back chairs, assuming that items B, C, D, and E are
available. For each MPS quantity, the scheduler works backward through the lead
time to determine when the assembly department must start producing chairs.
Consequently, a lot of 150 units must be started in week 1 and another in week 6.
These quantities correspond to the gross requirements in the MRP record for item C,
the seat subassembly, in Figure 16.6 (see Chapter 16, “Resource Planning”).

AVAILABLE-TO-PROMISE QUANTITIES
In addition to providing manufacturing with the timing and size of production quanti-
ties, the MPS provides marketing with information that is useful in negotiating delivery
dates with customers. The quantity of end items that marketing can promise to deliver
available-to-promise on specified dates is called available-to-promise (ATP) inventory. It is the difference
(ATP) inventory The between the customer orders already booked and the quantity that operations is plan-
quantity of end items ning to produce. As new customer orders are accepted, the ATP inventory is reduced to
that marketing can reflect commitment of the firm to ship those quantities, but the actual inventory stays
promise to deliver on unchanged until the order is removed from inventory and shipped to the customer. An
specified dates. available-to-promise inventory is associated with each MPS quantity because the MPS
quantity specifies the timing and size of new stock that can be earmarked to meet
future bookings.
Figure F.4 shows an MPS record with an additional row for the available-to-
promise quantities. The ATP in week 2 is the MPS quantity minus booked customer
orders until the next MPS quantity, or 150  (27  24  8  0  0)  91 units. The
ATP indicates to marketing that, of the 150 units scheduled for completion in week 2,
91 units are uncommitted, and total new orders up to that quantity can be promised
for delivery as early as week 2. In week 7, the ATP is 150 units because there are no
booked orders in week 7 and beyond.
The procedure for calculating available-to-promise information is slightly different
for the first (current) week of the schedule than for other weeks because it accounts for
the inventory currently in stock. The ATP inventory for the first week equals current
on-hand inventory plus the MPS quantity for the first week, minus the cumulative total
of booked orders up to (but not including) the week in which the next MPS quantity
F.6 Supplement F . Master Production Scheduling

FIGURE F.4
Item: Ladder-back chair Order Policy: 150 units
MPS Record with
Lead Time: 1 week
an ATP Row
April May
Quantity
55 1 2 3 4 5 6 7 8
on Hand:

Forecast 30 30 30 30 35 35 35 35

Customer
orders 38 27 24 8 0 0 0 0
(booked)

Projected
on-hand 17 137 107 77 42 7 122 87
inventory

MPS quantity 0 150 0 0 0 0 150 0

MPS start 150 0 0 0 0 150 0 0

Available-to-
promise (ATP) 17 91 150
inventory

Explanation: Explanation:
The total of customer orders The total of customer orders
booked until the next MPS booked until the next MPS
receipt is 38 units. The ATP = receipt is 27 + 24 + 8 = 59
55 (on-hand) + 0 (MPS units. The ATP = 150 (MPS
quantity) – 38 = 17. quantity) – 59 = 91 units.

arrives. So, in Figure F.4, the ATP for the first week is 55  0  38  17. This infor-
mation indicates to the sales department that it can promise as many as 17 units this
week, 91 more units sometime in weeks 2 through 6, and 150 more units in week 7 or
8. If customer order requests exceed ATP quantities in those time periods, the MPS
must be changed before the customer orders can be booked or the customers must be
given a later delivery date—when the next MPS quantity arrives. See the solved prob-
lem at the end of this supplement for an example of decision making using the ATP
quantities.

FREEZING THE MPS

The master production schedule is the basis of all end item, subassembly, component,
and materials schedules. For this reason, changes to the MPS can be costly, particularly
if they are made to MPS quantities soon to be completed. Increases in an MPS quantity
may cause delays in shipments to customers or excessive expediting costs because of
 Freezing the MPS F.7

shortages in materials. Decreases in MPS quantities can result in unused materials or

components (at least until another need for them arises) and tying up valuable capaci-
ties for something not needed. Similar costs occur when forecasted need dates for MPS
quantities are changed. For these reasons, many firms, particularly those with a make-
to-stock strategy and a focus on low-cost operations, freeze, or disallow changes to,
a portion of the MPS.
demand time fence The Freezing can be accomplished by specifying a demand time fence, which is the num-
number of periods ber of periods (beginning with the current period) during which few, if any, changes
(beginning with the can be made to the MPS (i.e., the MPS is firm). Companies select the demand time
current period) during fence after considering the costs of making changes to the MPS: The more costly the
which few, if any, changes changes, the more periods are included in the demand time fence. The costs of making
can be made to the MPS. changes to the MPS typically go down as the changes occur farther in the future. For
example, the Ethan Allen Furniture Company uses a demand time fence of eight weeks.
If the current week is week 1, the MPS is frozen for weeks 1 through 8 because the
costs of rescheduling the assembly line, the shop, and suppliers’ shipments are prohibi-
tive in that time frame. Neither the master scheduler nor the computer can reschedule
MPS quantities for this period without management’s approval. Making a change to
the schedule for week 10, for example, is much less costly because of the lead time that
everyone has to react to the change.
Other time fences that allow varying amounts of change can be specified. For
planning time fence A example, the planning time fence typically covers a longer period than the demand time
time fence that typically fence. The master scheduler—but not the computer—can make changes to MPS quan-
covers a longer period tities during this period of time. The cost of making changes to the MPS within the
than the demand time planning time fence is less than making changes to the MPS within the demand time
fence. fence. Beyond the planning time fence the computer may schedule the MPS quantities,
based on the approved ordering policy that is programmed into the computer.
Figure F.5 shows a demand time fence of two weeks and a planning time fence of six
weeks for the ladder-back chair MPS. The MPS quantity in week 2 cannot be changed
without management’s approval. The MPS quantity in week 7 can be changed by the
master scheduler without management’s approval. The MPS quantities beyond week 8
can be changed by the computer, based on policies approved by management that are
programmed into the computer.
The number of time fences can vary. Black & Decker uses three time fences: 8, 13,
and 26 weeks. The 8-week fence is essentially a demand time fence. From 8 to 13
weeks, the MPS is quite rigid, but minor changes to model series may be made if com-
ponents are available. From 13 to 26 weeks, substitution of one end item for another is
permitted as long as the production plan is not violated and components are available.

FIGURE F.5
Week
Master Production
Schedule Time Fences 1 2 3 4 5 6 7 8 9 10

MPS
0 150 0 0 0 0 150 0 0 0
quantity

Demand Planning time fence

time
fence
F.8 Supplement F . Master Production Scheduling

Beyond 26 weeks, marketing can make changes as long as they are compatible with the
production plan.
The length of time fences should be reviewed periodically and adjusted as necessary.
Although freezing the MPS reduces manufacturing costs and makes life easier for those
responsible for scheduling components and materials, it tends to make the MPS less
responsive to changes in customer demand. The costs of not being able to satisfy cus-
tomers who place unexpected orders for delivery within the demand time fence must be
weighed against the savings in production costs.

SUPPLEMENT HIGHLIGHTS
❐ The master production schedule is a link between a firm’s ❐ Available-to-promise quantities enable the sales
broad strategies and the tactical plans that enable the department to establish realistic delivery dates with
firm to achieve its goals. The MPS provides essential customers.
information for functional areas such as operations, mar-
❐ Firms with a make-to-stock strategy and a focus on
keting, and finance.
low-cost operations often freeze portions of their
❐ MPS quantities are scheduled to avoid shortages. A con- master production schedules to stabilize operations
servative approach to estimating the on-hand inventory in because unplanned changes to the MPS can be very
future periods is used: The estimated requirements for any costly.
period are the greater of the actual orders booked for that
period or the forecast.

KEY TERMS
available-to-promise (ATP) demand time fence F.7
inventory F.5 planning time fence F.7

SOLVED PROBLEM
The order policy is to produce end item A in lots of 50 units. Using the data shown in Figure F.6
and the FOQ lot-sizing rule, complete the projected on-hand inventory and MPS quantity rows.
Then complete the MPS start row by offsetting the MPS quantities for the final assembly lead
TUTOR time. Finally, compute the available-to-promise inventory for item A. If in week 1, a customer
F.1
requests a new order for 30 units of item A, when is the earliest date the entire order could be
shipped?

SOLUTION

The projected on-hand inventory for the second week is

       
Projected on-hand On-hand
MPS quantity Requirements
inventory at end  inventory in  
due in week 2 in week 2
of week 2 week 1
 25  0  20  5 units
 Solved Problem F.9

Item: A Order Policy: 50 units

Lead Time: 1 week

Week
Quantity
5 1 2 3 4 5 6 7 8 9 10
on Hand:

Forecast 20 10 40 10 0 0 30 20 40 20

Customer
orders 30 20 5 8 0 2 0 0 0 0
(booked)

Projected
on-hand 25
inventory

MPS quantity 50

MPS start

Available-to-
promise (ATP)
inventory

FIGURE F.6

where requirements are the larger of the forecast or actual customer orders booked for shipment
during this period. No MPS quantity is required.
Without an MPS quantity in the third period, there will be a shortage of item A: 5  0  40 
35. Therefore, an MPS quantity equal to the lot size of 50 must be scheduled for completion in
the third period. Then the projected on-hand inventory for the third week will be 5  50 
40  15.
Figure F.7 shows the projected on-hand inventories and MPS quantities from OM Explorer
that would result from completing the MPS calculations. The MPS start row is completed by
simply shifting a copy of the MPS quantity row to the left by one column to account for the
one-week final assembly lead time. Also shown are the available-to-promise quantities. In
week 1, the ATP is

       
Available-to- On-hand Orders booked up
MPS quantity
promise in  quantity in   to week 3 when the
in week 1
week 1 week 1 next MPS arrives
 5  50  (30  20)  5 units
The ATP for the MPS quantity in week 3 is

     
Available-to- Orders booked up
MPS quantity
promise in   to week 7 when the
in week 3
week 3 next MPS arrives
 50  (5  8  0  2)  35 units
F.10 Supplement F . Master Production Scheduling

Inputs

FIGURE F.7

The other ATPs equal their respective MPS quantities because there are no booked orders for
those weeks. As for the new order for 30 units, the earliest it can be shipped is week 3 because
the ATP for week 1 is insufficient. If the customer accepts the delivery date of week 3, the ATP for
week 1 will stay at 5 units and the ATP for week 3 will be reduced to 5 units. This acceptance
allows the firm the flexibility to immediately satisfy an order for 5 units or less, if one comes in.
The customer orders booked for week 3 would be increased to 35 to reflect the new order’s ship-
ping date.

DISCUSSION QUESTIONS
1. Form a group in which each member represents a differ- 2. Consider the master flight schedule of a major airline,
ent functional area of a firm. Provide a priority list of the such as Northwest Airlines. Discuss the ways such a
information that could be generated from an MPS, from schedule is analogous to a master production schedule
the most important to the least important, for each func- for a manufacturer.
tional area. Rationalize the differences in the lists.

OM EXPLORER AND INTERNET EXERCISES

Visit our Web site at www.prenhall.com/krajewski for OM Explorer Tutors, which explain quantitative techniques;
Solvers, which help you apply mathematical models; and Internet Exercises, including Facility Tours, which expand
on the topics in this chapter.

PROBLEMS
1. OM Explorer Complete the MPS record in Figure F.8 50 units. The current on-hand inventory is 80 units.
for a single item. The order policy is to produce in lots of 100. The
booked customer orders for the item, starting with
2. OM Explorer Complete the MPS record shown in
week 1, are 22, 30, 15, 9, 0, 0, 5, 3, 7, and 0 units. At
Figure F.9 for a single item.
present, there are no MPS quantities for this item.
3. OM Explorer An end item’s demand forecasts for The lead time is two weeks. Develop an MPS for this
the next 10 weeks are 30, 20, 35, 50, 25, 25, 0, 40, 0, and end item.
 Problems F.11

Item: A Order Policy: 60 units

Lead Time: 1 week

Week
Quantity
35 1 2 3 4 5 6 7 8
on Hand:

Forecast 20 18 28 28 23 30 33 38

Customer
orders 15 17 9 14 9 0 7 0
(booked)

Projected
on-hand
inventory

MPS quantity

MPS start

FIGURE F.8

Item: A Order Policy: 100 units

Lead Time: 1 week

January February
Quantity
75 1 2 3 4 5 6 7 8
on Hand:

Forecast 65 65 65 45 50 50 50 50

Customer
orders 40 10 85 0 35 70 0 0
(booked)

Projected
on-hand
inventory

MPS quantity

MPS start

FIGURE F.9
F.12 Supplement F . Master Production Scheduling

Assume that you must commit to the orders in the

4. OM Explorer At present, there are 50 units of an
sequence of arrival and cannot change the desired
end item in inventory. Order policy is fixed at 125 units.
shipping dates or your MPS. Which orders should you
a. Complete the MPS record in Figure F.10 for this end item. accept?
b. The MPS in part (a) was not approved. During the
approval process, the MPS quantity in week 9 was 6. OM Explorer Morrison Electronics has forecasted
brought forward to week 2. For this changed MPS, the following demand for one of its products for the next
revise the projected on-hand inventory row in Figure eight weeks: 70, 70, 65, 60, 55, 85, 75, and 85. The
F.10, and list the advantages and concerns associated booked customer orders for this product, starting in week
with this change. 1, are 50, 60, 55, 40, 35, 0, 0, and 0 units. The current
on-hand inventory is 100 units, the order quantity is
5. OM Explorer Figure F.11 shows a partially com- 150 units, and the lead time is 1 week.
pleted MPS record for ball bearings.
a. Develop an MPS for this product.
a. Develop the MPS for ball bearings. b. The marketing department at Morrison has revised
b. Four customer orders arrived in the following sequence: its forecasts. Starting with week 1, the new fore-
casts are 70, 70, 75, 70, 70, 100, 100, and 110 units.
WEEK Assuming that the prospective MPS you developed
ORDER QUANTITY DESIRED in part (a) does not change, prepare a revised MPS
record. Comment on the situation that Morrison
1 500 4
now faces.
2 400 5
3 300 1 7. OM Explorer Figure F.12 on page F.14 shows a
4 300 7 partially completed MPS record for 2 pneumatic con-

Item: A Order Policy: 125 units

Lead Time: 1 week

Week
Quantity
50 1 2 3 4 5 6 7 8 9 10
on Hand:

Forecast 10 15 20 30 40 60 80 120 120 120

Customer
orders 12 9 11 5 2 0 4 0 0 0
(booked)

Projected
on-hand
inventory

MPS quantity

MPS start

FIGURE F.10
 Problems F.13

Item: Ball bearings Order Policy: 500 units

Lead Time: 1 week

Week
Quantity
400 1 2 3 4 5 6 7 8 9 10
on Hand:

Forecast 550 300 400 450 300 350 200 300 450 400

Customer
orders 300 350 250 250 200 150 100 100 100 100
(booked)

Projected
on-hand
inventory

MPS quantity 500

MPS start

Available-to-
promise (ATP)
inventory

FIGURE F.11

trol valves. Suppose that you have received the follow- b. A distributor of the hand drills places an order for
ing orders for the valves (shown in the order of their 15 units. What is the appropriate shipping date for
arrival). As they arrive you must decide whether to the entire order?
accept or reject them. Which orders would you accept
for shipment? 9. OM Explorer A forecast of 240 units in January,
320 units in February, and 240 units in March has been
approved for the seismic-sensory product family manu-
ORDER AMOUNT (UNITS) WEEK REQUESTED factured at the Rockport facility of Maryland Automated,
1 15 2
Inc. Three products, A, B, and C, comprise this family. The
2 30 5 product mix ratio for products A, B, and C for the past two
3 25 3 years has been 35 percent, 40 percent, and 25 percent,
4 75 7 respectively. Management believes that the monthly
forecast requirements are evenly spread over the
four weeks of each month. Currently, there are 10 units
8. OM Explorer The forecasted requirements for an of product C on hand. The company produces product C
electric hand drill for the next six weeks are 15, 40, 10, in lots of 40, and the lead time is 2 weeks. A production
20, 50, and 30 units. The marketing department has quantity of 40 units from the previous period is sched-
booked orders totaling 20, 25, 10, and 20 units for deliv- uled to arrive in week 1. The company has accepted
ery in the first (current), second, third, and fourth weeks. orders for product C of 25, 12, 8, 10, 2, and 3 of product C
Currently, 30 hand drills are in stock. The policy is to in weeks 1–6, respectively. Prepare a prospective MPS
order in lots of 60 units. Lead time is one week. for product C and calculate the available-to-promise
a. Develop the MPS record for the hand drills. inventory quantities.
F.14 Supplement F . Master Production Scheduling

Item: 2” Pneumatic control valve Order Policy: 75 units

Lead Time: 1 week

Week
Quantity
10 1 2 3 4 5 6 7 8
on Hand:

Forecast 40 40 40 40 30 30 50 50

Customer
orders 60 45 30 35 10 5 5 0
(booked)

Projected
on-hand
inventory

MPS quantity 75 75

MPS start 75

Available-to-
promise (ATP)
inventory

FIGURE F.12

SELECTED REFERENCES
Bruggeman, J. J., and S. Haythornthwaite. “The Master Schedule.” Ptak, Carol. MRP and Beyond. Homewood, Ill.: Irwin Professional
APICS—The Performance Advantage (October 1991), pp. 44–46. Publication, 1996.
Dougherty, J. R., and J. F. Proud. “From Master Schedules to Finishing Vollmann, T. E., W. L. Berry, and D. C. Whybark. Manufacturing
Schedules in the 1990s.” American Production and Inventory Planning and Control Systems, 4th ed. Homewood, Ill.: Irwin
Control Society 1990 Annual Conference Proceedings, pp. 368–370. Professional Publication, 1997.
Lunn, Terry, and Susan Neff. MRP: Integrating Material Requirements Wallace, Tom. MRP II: Making It Happen. Essex Junction, VT: Oliver
Planning and Modern Business. Homewood, Ill.: Irwin Professional Wight Ltd., Publishers, 1994.
Publication, 1992.