Master Production Schedule (MPS) for Breadmaker

Master Production Schedule (MPS) for Breadmaker

Master Production Plan

The production schedule was computed using the formula Elt = Elt-1+MPST-maximum (Ft₁, OBt)

To determine the amount of production Johnny is planning 3 weeks before, the formula below was used.

ATP represents available to promise

Has Realco “Overpromised”?

Realco has overpromised because the available to promise is lower than the orders booked and the demanded forecast. There is, therefore, a risk of having no products to meet the demand hence disappointing clients who may be expecting timely delivery as promised. The company has also overpromised because the ending inventory is generally low, while the available-to-promise values are low during the first five weeks compared to the last three weeks.

The company should consider adjusting its production to meet the demand based on the fact that a matching reduction in production should be proportional to the most updated estimated demand. The company should continue monitoring booed orders and consider bringing down expected demands to align them with the company’s real demands. Meeting customer demands will help in increasing customer loyalty, thus creating a competitive advantage for the company. According to Von Faber & Behnsen (2017), meeting customer demands also plays a significant role in increasing sales because existing customers refer other customers, hence increasing the customer base and the demand for the products being offered by the company. Adjusting production will also help the company develop agility which, according to Bozarth & Handfield (2018), helps in quickly responding to interruptions in the supply chain

Advantages and Disadvantages of Jack’s Approach, Master Scheduling and Organizational Changes

One of the advantages of Jack’s approach is that it helps in creating a solid foundation to develop, improve, and monitor sales forecasts based on changes in demand. The second advantage is that it is an effective barrier against the shortage of raw materials because the company can plan the raw materials required based on forecasted demand and production schedules. Another advantage is that there would be certainty in selling while producing. Therefore, the cost incurred is cashed in within a short time. This creates value in the money flowing in and out of the company because of increased money velocity. The approach also taps the market by ensuring that customers only get their products from Realco because customers develop loyalty based on the fact that they feel obligated to fulfill their purchase at Realco. The main disadvantage of the approach is that it can negatively affect demand and the company’s reputation if the deliveries are not made as planned. Order cancellations may also result in losses and overproduction.

The formal master scheduling would improve this process by enabling the production team to easily make adjustments to any type of demand fluctuation while minimizing the waste produced in the whole production process. It would also prevent any type of shortage of inventory or errors within scheduling (Proud, 2013). Master scheduling would also improve efficiency by overseeing production and accommodating any sudden changes in production and scheduling.

The main organizational change that would be required is creating a production team that will include the production planners, technical support team, and operations team. Every stakeholder in the production process should also be part of the update and feedback process. The company should additionally establish a time and method for operations to report any missed schedules to prevent the failure to deliver within the time expected by clients. Another change is that the production base would not be founded on experience but customer prerequisite orders implying that the management approach that would be used would be based on a review of customer requirements instead of past experiences.

The Impact of Refusing a Customer’s Order Because of Lack of Supply of the Product Versus Accepting the Order and Failing to Deliver

Refusing a customer’s order due to lack of supply of the product would make the clients lose faith in the company’s ability to supply in the future, thus making them opt for another supplier. This results in a reduction in demand and cancelation of existing orders due to clients’ uncertainty about the company’s ability to deliver what they have ordered on time. Accepting the order and failing to deliver may, on the other hand, ruin the company’s reputation and reduce demand because the company will be recognized as unreliable. It is therefore important to consider master scheduling. One of the implications of this type of scheduling is enabling the company to predict and differentiate whether or not the company is able to meet a specific order. It also helps to protect lead time because the company can regulate the number of orders it accepts.

The Impact on Average Inventory Levels and Production if Realco Produces 20,000 Breadmakers Every Week Rather Than 40,000 Every Other Week

Reducing Realco’s production levels to 20,000 per week would reduce the company’s ability to meet most of its orders hence reducing inventory. The reduction in inventory would be because the orders would finish all available products, and there would be fewer products left in the inventory. The company would also have fewer goods available to promise because production would be stabilized.

References

Bozarth, C. B., & Handfield, R. B. (2018). Introduction to Operations and Supply Chain Management (5th ed.). Pearson Education.

Proud, J. F. (2013). Master scheduling: A practical guide to competitive manufacturing. John Wiley & Sons.

Von Faber, E., & Behnsen, W. (2017). Fulfillment – meeting customer demands. Secure ICT Service Provisioning for Cloud, Mobile and Beyond, 139-157. https://doi.org/10.1007/978-3-658-16482-9_8

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Create a master production schedule for the breadmaker in the case that considers production levels, demand for the product, and the best business strategy for the situation presented. Consider the below bullet points.
What do the projected ending inventory and available-to-promise numbers look like?

Master Production Schedule (MPS) for Breadmaker

Has Realco “overpromised”?
In your view, should Realco update either the forecast or the production numbers?
Evaluate the advantages and disadvantages of Jack’s approach, considering how master scheduling can improve the process, and considering the organizational changes needed to increase the efficiency and effectiveness of the process. Consider the below bullet points.
What are the advantages? The disadvantages?
How would formal master scheduling improve this process?
What organizational changes would be required?
Examine the impact of refusing a customer’s order because of lack of supply of the product versus accepting the order and failing to deliver
What are the implications for master scheduling?
Describe the impact on average inventory levels and production if Realco produces 20,000 breadmakers every week rather than 40,000 every other week.