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Introduction To Materials Management
Introduction To Materials Management
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Priority Capacity
Key is to match
What is needed, when, and how much Capability to produce what is needed and when
Priority (Demand) Capacity (Resources)
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
What is the available capacity? How can the differences between priorities and capacities best be resolved?
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed. 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Planning Hierocracy
Strategic Business Plan Production Plan Master Production Schedule Material Requirements Plan
Implementation
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Production Plan
Quantities of each product group to be produced each period Projected/desired inventory levels Resources needed
Equipment Labor Material
Purchasing
Similar to Production Activity Control, only includes items to be purchased rather than produced.
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed. 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Capacity Management
At each level of the planning and control system, reconciliation with resources must be made
Must obtain the right resources or change the plan
Inadequate resources = missed production schedules Resources significantly exceed planned production = idle resources and extra cost
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed. 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Weekly or Daily
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Level establish average demand level and set production rate to that level
Often used when resources difficult or very expensive to change
For Example:
No. of Units
Demand
Time
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Chase Production:
No. of Units
Chase Production
Demand
Time
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Level Production:
No. of Units
Level Production
Demand
Time
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Level Production:
No. of Units
CREATE Inventory
Demand
Time
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Hybrid:
No. of Units
Hybrid Demand
Time
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed. 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Numerical Example:
Suppose the forecasted demand for a product family looks like the table below. Assume the product family is a Make-to-Stock family with a starting inventory of 100.
1 150
2 160
3 180
4 175
5 155
6 140
Total 960
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.