MASTER PRODUCTION SCHEDULING

• Master Production Schedule (MPS) breaks the aggregate

plan into specific quantities of individual products to be
produced in designated time periods (relatively smaller
periods as compared to those used in aggregate planning.
Periods used in MPS are generally in weeks).

•MPS breaks the aggregate production plan into

specific products schedules i.e. it details how many
end items (and of what type) will be produced within
specified period (MPS planning periods can be in hours,

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days, weeks or months, depending upon the firm and its
products).
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Difference in the format used in Aggregate Plan and MPS

For a particular planning period, the sum of quantities in the MPS is equal to that in the
corresponding aggregate plan.
Each planning period of aggregate plan (in the example above, planning period is month’s period) is
further split into smaller planning periods in MPS (here, split into weeks). The critical function of
master production scheduling is to allocate the aggregate production quantities efficiently over its
planning periods (e.g. production quantity of 600 units of September month shown in aggregate plan
has been allocated as 150, 100, 200 and 150 units respectively in weeks 1, 2, 3 and 4 respectively of
this month). This allocation is based on several factors which include :
historic demand

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marketing and promotional considerations
lot size of each product type in each period of MPS is decided on the basis of set- up costs,
working capital required for production of a lot etc.
capacity limitations; this includes labour, machine, storage capacities, availability of spares.
• It is on the basis of the above mentioned factors that timing and size of MPS quantities
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determined.
FUNCTIONS OF MASTER PRODUCTION SCHEDULE

Splits Aggregate Plan into more Specific Details

Master Production Schedule (MPS) translates the aggregate plan into specific
end items. Aggregate production plan takes into account the demand forecasts and
customer orders and decides the production strategy to run production operations. It
sets a level of operations that roughly balance market demands with the material,
labour and equipment capabilities of the firm. Master Production Schedule translates
this plan into specific number of end items or modules to be produced in specific time
periods. Products are grouped into lot sizes that are economical to produce and
realistically load firm’s facilities. MPS should neither, overload nor underload the
firm’s facilities.

Generates Material Requirements

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Master Production Schedule is the main input for Material
Requirements Planning system of the firm. When end items appear on the
MPS, it signals the MRP system to purchase/ produce necessary components
for meeting delivery schedules. 3
FUNCTIONS OF MASTER PRODUCTION SCHEDULE

Evaluates Alternative Schedules

To prepare an acceptable master production schedule, is a trial
and error work and rework (iterative) activity. First, a tentative
master schedule is proposed (based on historic demand,
promotional considerations etc.). Then, the end item requirements
are extended into material requirements and capacity requirements
to determine how the production system will respond to this
proposed master schedule. In case, this schedule is not meeting the
requirements, it is revised and new master schedule is prepared.
Master Production Schedule (MPS) is revised until a schedule is
obtained that satisfies all resource limitations or determines that no
alternative schedule can be developed. In the latter case, the

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aggregate plan will have to be revised to adjust either production
requirements or increase authorized resources.
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FUNCTIONS OF MASTER PRODUCTION SCHEDULE

Results in Effective Utilization of Resources

Master Production Schedule (MPS) specifies the end item
requirements and thus establishes the load and utilization
parameters for labour and available production facilities. To utilize
the capacity most effectively, MPS may call for delaying some orders
or building others ahead of demand. A good master schedule
reflects economic usage of labour and machine capacities. When
capacity requirements are not appropriate, master production
schedule should be revised.

Maintains Valid Priorities

Master Production Schedule should set valid and right
priorities.

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Steps in Master Production Scheduling Process

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TYPES OF MASTER PRODUCTION SCHEDULE
Two basic formats are used in Master Production Schedule: the first type of format is used for firms
based on make to stock approach and the second format is for firms based on make to order
approach. Thus, there are two basic types of master schedules.

MPS for Make to Stock Firms: Demand forecasts are the main input for master production schedule
of firms based on make to stock strategy. The format used for MPS of such firms is shown as follows:

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The MPS shown in the above figure is using a planning horizon of roughly a quarter
of a year (here, 13 weeks) and the planning periods are in weeks. MPS is said to have
three portions namely Firm, Flexible and Open portion.

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TYPES OF MASTER PRODUCTION SCHEDULE

‘Firm’ portion of the MPS is in the very immediate future. No changes or revisions can be
made to the production quantities listed in this portion. This is because this portion
encompasses minimum lead times necessary for components. For quantities listed in this
portion, orders have been placed for materials, components etc. required or they have
reached; routing and scheduling functions have been completed. Thus production quantities
listed in ‘firm’ portion are practically freezed and no changes are accepted. In the example
shown in the above Figure, period up to the sixth week is being considered as firm portion. As
each week passes, seventh week is advanced to the ‘firm’ portion.

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The portion beyond the ‘firm’ portion up to the planning horizon is called ‘flexible’ portion. If
some production quantities listed in the ‘firm’ portion could not be completed, they are passed
to the ‘flexible’ portion. Changes in the early parts of ‘flexible’ portion should be discouraged.

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TYPES OF MASTER PRODUCTION SCHEDULE

The portion of MPS beyond the planning horizon is termed as ‘open’ portion. This
portion can accommodate changes as it is away at a very distant future and the time
available is more than component lead times. It is this portion where trial-and-error work
and rework activities are taking place to decide on lot sizes, valid priorities, and other
details.

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TYPES OF MASTER PRODUCTION SCHEDULE
MPS for Make to Order Firms: The master schedule for firms based on make to order
approach is shown in Figure below:
Consider a company producing customized products of five different types. Suppose the
plant capacity is 60 standard hours per day.
MPS Format for manufacturing organizations based on Make to Order Strategy

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