Exercise 1
Preparing a Processes Planning for Master Production Schedule (MPS)
Franze Sdn Bhd is a metal steel fabrication company operating in Penang, producing various type of products in metal fabrication. The company normally purchases 1000 pieces of 10’ x 12’ metal sheets each week. These metal sheets are processed into metal boxes 2'x5'x2' for their customers. The following are the process capacity and output:
Process A cutting machine capacity can run up to 200 sheets per day. But, current output of finished boxes per day is 50 pieces of 5’x2’x2' metal sheet. Every two metal sheets purchased can generate 5 boxes of finish products. Each day the operations department produces 50 boxes of finish products. Calculate the production capacity and determine how to increase output.
2' | 2' | 2' | 2' | 2' | 2' | ||
5' | 2' | ||||||
2' | |||||||
2' | |||||||
5' | |||||||
2' | |||||||
2' | |||||||
Std 10'x12' Metal sheets Input | Std output of metal sheets cut | Current input | Current Output | Planned Input | Planned Output | |
Process A: Input raw sheets Cutting 2'x10' | 1 | 6 | 20 | 120 | 100 | 600 |
Process B: Input from A, Cutting 2'x5' | 5 | 2 | 100 | 200 | 500 | 1000 |
Process c: Input from A, Cutting 2'x2' | 1 | 5 | 20 | 100 | 100 | 500 |
Process D: Input from B, Clipping | 2 | 0,5 | 200 | 50 | 1000 | 250 |
Process E: Input from C & Clipping on D | 5 | 2,5 | 100 | 50 | 500 | 250 |
Finish Product QA | 2,5 | 2,5 | 50 | 50 | 250 | 250 |
The above production shows that process A is producing at 10% of its capable capacity of 200 sheets per day. Why? Further Investigation shows that Process A cutting speed can be increased to process 50 pcs per day. Remember Process A capacity can be increased max 200 pcs a day.
Process B Capacity can process up to 2000 cut pieces per day. Meaning,
Process A, 200 x 6 = 1200 pieces is not an issue.
Process C capacity can process inputs up to 500 pieces 2'x2'.
Process D can clip inputs up to 1000 pieces a day.
Process E can clip and hinge inputs up to 500 pcs a day.
QA is an inspection process that can complete all outputs.
Question:
1. What are the processes that becomes the constraints to the business plan?
2. Calculate is the maximum output of finish product that can be produced based on the above processes constraints.
Exercise 2
Preparing MPS for a Business Plan
Demand Plan
Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Customer Demand | 200 | 250 | 300 | 350 | 450 | 550 | 650 | 750 |
Master Production Schedule
Daily Outputs | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 |
Weekly (5 day week) Outputs | 250 | 250 | 250 | 250 | 250 | 250 | 250 | 250 |
Week Opening balance | 0 | 50 | 50 | 0 | -100 | -300 | -600 | -1000 |
Week Closing balance | 50 | 50 | 0 | -100 | -300 | -600 | -1000 | -1500 |
The above explains the demands from the customer for the first eight weeks. The MPS are base on current daily outputs from exercise 1. Weekly opening and closing balance are showing negative balances due to shortage of daily and weekly outputs that could not support the demands from the customers. |
Question:
1. Identify what is the daily and weekly outputs of finish products should be produced.
2. Identify how the volumes of outputs should be increase.
3. Identify how the market volumes need to be increase as well for the weeks 9-12.
My attempt answering exercise 2:
Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | total |
Customer Demand | 200 | 250 | 300 | 350 | 450 | 550 | 650 | 750 | 3.500 |
50 | 50 | 50 | 100 | 100 | 100 | 100 |
Master Production Schedule
Daily Outputs | 90 | 90 | 90 | 90 | 90 | 90 | 90 | 90 | total |
Weekly (5 day week) Outputs | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 3.600 |
Week Opening balance | 0 | 250 | 450 | 600 | 700 | 700 | 600 | 400 | |
Week Closing balance | 250 | 450 | 600 | 700 | 700 | 600 | 400 | 100 |
Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Customer Demand | 200 | 250 | 300 | 350 | 450 | 550 | 650 | 750 | 850 | 950 | 1050 | 1150 |
50 | 50 | 50 | 100 | 100 | 100 | 100 |
Master Production Schedule | ||||||||||||
Daily Outputs | 90 | 90 | 90 | 90 | 90 | 90 | 90 | 90 | 200 | 200 | 200 | 200 |
Weekly (5 day week) Outputs | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 450 | 1000 | 1000 | 1000 | 1000 |
Week Opening balance | 0 | 250 | 450 | 600 | 700 | 700 | 600 | 400 | 100 | 250 | 300 | 250 |
Week Closing balance | 250 | 450 | 600 | 700 | 700 | 600 | 400 | 100 | 250 | 300 | 250 | 100 |
To avoid the negative closing/ opening balance on every week and on week 8, the daily outputs is 90.
On the week 9, if the demand is stable, and to avoid the negatif closing/opening balance on everyweek and on week 12, the daily output should be increased to maximum output 200.
resource:lesson entrepreneurship in global business
