MT 303 1st Edition Lecture 6Previous Chapter Outline1. Supply Chain Management2. The Purchasing Cycle3. Ethics in Purchasing4. Creating an Effective Supply Chain5. Aggregate Production Plan6. StrategiesChapter Outline1.Tableau Method2. Overtime in US companies3. Master Production Schedule4. MRP and ERP5. Typical MRP format6. MRP7. Capacity Requirements PlanningI. Tableau MethodThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.a. Step 1: formulation i. Rows and columnsb. Step 2: Production rate/monthi. Regular timeii. Over timeiii. Idle timeiv. Subcontractingc. Step 3: APP interpretationi. Best APP is the lowest costII. Overtime in US companiesa. The Bureau of Labor Statistics reports that more than a tenth of all work done in the nation’s factories is performed on overtimeb. One reason employers are going the overtime route is that overtime pay doesn’t cost much extra.i. Fringe benefits are mostly covered by the first 40 hours workedii. Overtime hours generally are worked by employers most skilled and productive peopleIII. Master Production Schedulea. Objective is to develop a production plan for specific end itemsi. How muchii. Whenb. Input is APP and OH inventoriesc. Characteristics are a weekly production plan for the next 16 to 26 weeksd. Output is material requirements planninge. The person is charge is the master schedulerf. Rough cut capacity planningi. Validates MPSii. It is used to determine whether sufficient production capacity will exist to meet the MPSIV. MRP and ERPa. Objective- to develop a timei. Phased production and purchasing plan for all components, parts and raw materials, called dependent or lumpy demandii. Input1. Authorized MPS2. BOM (Bill of Materials)iii. Inventory data1. POH- projected on hand inventory2. LT- lead time- time between releasing and receiving an order3. SR- Scheduled Receipts- orders already released, being delivered (either manufactured or shipped), quantity (due date)4. SS- Safety Stock- to be used in emergencies- to control stockoutsiv. Quantity Pattern1. Lot for lot- order exactly what us needed2. Fixed quantitya. Minimum orderb. Multiple orders3. Characteristicsa. 8 to 16 weeks time frame with weekly time bucketb. Output- purchasing department for raw materials, production floor for items producedc. Materials manager is responsibleV. Typical MRP formata. Gross requirementsi. Quantity and week the item must be availableb. Scheduled receiptsi. From inventory datac. Projected on hand inventoryi. End or beginning of weekd. Net requirementi. Reduced by OH and SRe. Planned Receiptsf. Planned Order ReleaseVI. MRPa. Characteristicsi. Right time, right quantity, right quality, right placeii. Requirements1. Data accuracy2. Discipline3. Product improvement/ redesigniii. Pegging1. Reverse time phased process to enable managers to determine which products will be affected if orders are late due to late deliveries, quality problems, or other problems.iv. Backflushing1. Exploding an end items bill of materials to determine the quantities of the components that were used to make the itemVII. Capacity requirements planninga. Objectivei. To establish, measure, and adjust limits or levels of capacity that will be required at each work center or machine b. Inputi. MRP and routing data for parts manufactured in housec. Characteristicsi. Validates MRP, usually in the form of load reportd. Outputi. Production activity controle. Materials manager is