Nigel S., Chambers S., Johnson R. Operations Management

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Web-integrated ERP

Perhaps the most important justiﬁcation for embarking on ERP is the potential it gives the

organization to link up with the outside world. For example, it is much easier for an operation

to move into internet-based trading if it can integrate its external Internet systems into its

internal ERP systems. However, as has been pointed out by some critics of the ERP soft-

ware companies, ERP vendors were not prepared for the impact of e-commerce and had not

made sufﬁcient allowance in their products for the need to interface with internet-based

communication channels. The result of this has been that whereas the internal complexity

of ERP systems was designed only to be intelligible to systems experts, the Internet has

meant that customers and suppliers (who are non-experts) are demanding access to the same

information. So, important pieces of information such as the status of orders, whether pro-

ducts are in stock, the progress of invoicing, etc., need to be available, via the ERP system, on

a company’s web site.

One problem is that different types of external company often need different types of

information. Customers need to check the progress of their orders and invoicing, whereas

suppliers and other partners want access to the details of operations planning and control. Not

only that, but they want access all the time. The Internet is always there, but web-integrated

ERP systems are often complex and need periodic maintenance. This can mean that every

time the ERP system is taken ofﬂine for routine maintenance or other changes, the web site

also goes ofﬂine. To combat this some companies conﬁgure their ERP and e-commerce links

in such a way that they can be decoupled so that ERP can be periodically shut down without

affecting the company’s web presence.

Web-integrated ERP

Part Three Planning and control

414

The market-leading ERP systems supplier SAP, like

many other similar companies, relies on independent

consultants to sell and implement its products. Here is a

typical example.

Satyam Computer Services Ltd., a global consulting

and IT services provider, announced in 2009 that it had

been awarded a contract to implement a SAP product

(SAP Business All-in-One) for Vijay Dairy & Farm

Products, one of the leading dairy processors in India.

The dairy ﬁrm started in 1995. It produces milk and milk

products, such as butter, ghee, curd, butter milk, and

ﬂavoured milk in bottles, by buying surplus cows’ milk

from farmers and using superior technology to process it.

It has a processing capacity of 125,000 litres of cows’

milk per day, and a distribution network covering the

entire state of Tamil Nadu. With demanding hygiene

requirements, perishable products and supply schedules

that demand daily accuracy, managing the company’s

planning process is a complex task. That is why the

company opted for an ERP system to help it keep control

of its operations. The ERP solution should automate and

integrate key business processes across the company,

speeding workﬂow, improving quality, and lowering costs.

‘Managing our supply – especially procurement and

pricing – is a complex process that will now be greatly

Short case

SAP at Vijay Dairy & Farm

oducts

simpliﬁed. Stand-alone processes will be integrated for

the ﬁrst time, and we will be able to monitor product

quality at multiple points during procurement and

production, enabling us to deliver the freshest quality

products to customers at lower costs’ (J. Madhan Mohan,

Managing Director, Vijay Dairy & Farm Products).

But why did they choose Satyam to implement the

new ERP system? ‘Satyam understands the business

challenges faced by Vijay Dairy & Farm Products, and

will deliver a powerful, proven solution to transform

their entire Procurement-to-Sales process’, said Manish

Mehta, Global Head, SAP and Managed Testing Practices

at Satyam. ‘Decision-makers at Vijay will have much

Source: Alamy Images

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Chapter 14 Enterprise resource planning (ERP)

415

faster access to more (and more accurate) information

from across their enterprise, resulting in improved

operational efﬁciency and effectiveness’, he added.

Satyam is also an Indian company, although it has

operations world-wide, so it fully understands the

operating and implementation environment. At the

same time it is a global information technology

company, with experience of ERP and other systems

implementations in many industries. ‘We selected Satyam

for their unrivaled SAP credentials, their strong domain

knowledge, and their ability to deliver a cost-effective

solution in less time. Satyam also demonstrated excellent

partnership abilities [it] means lower risk and faster

deployment’ (Manish Mehta).

Supply chain ERP

The step beyond integrating internal ERP systems with immediate customers and suppliers

is to integrate all the ERP and similar systems along a supply chain. Of course, this can never

be straightforward and is often exceptionally complicated. Not only do different ERP systems

have to communicate together, they have to integrate with other types of system. For example,

sales and marketing functions often use systems such as customer relationship management

(CRM, see Chapter 13) that manage the complexities of customer requirements, promises

and transactions. Getting ERP and CRM systems to work together is itself often difﬁcult.

Sometimes the information from ERP systems has to be translated into a form that CRM and

other e-commerce applications are able to understand. Nevertheless, such web-integrated

ERP or c-commerce (collaborative commerce) applications are emerging and starting to

make an impact on the way companies do business. Although a formidable task, the beneﬁts

are potentially great. The costs of communicating between supply chain partners could be

dramatically reduced and the potential for avoiding errors as information and products move

between partners in the supply chain are signiﬁcant. Yet, as a ﬁnal warning note, it is well to

remember that although integration can bring all the beneﬁts of increased transparency in a

supply chain, it may also transmit systems failure. If the ERP system of one operation within

a supply chain fails for some reason, it may block the effective operation of the whole integrated

information system throughout the chain.

Implementation of ERP systems

By their nature, ERP systems are designed to address problems of information fragmentation.

Therefore any ERP system will be complex and difﬁcult to get right. Implementing this type

of system will necessarily involve crossing organizational boundaries and integrating internal

processes that cover many, if not all, functional areas of a business. Building a single system

that simultaneously satisﬁes the requirements of operations managers, marketing and sales

managers, ﬁnance managers and everyone else in the organization is never going to be easy.

It is likely that each function will have its own set of processes and a well-understood system

that has been designed for its speciﬁc needs. Moving everyone onto a single, integrated system

that runs off a single database is going to be potentially very unpopular. Furthermore, few

people like to change, and ERP asks almost everyone to change how they do their jobs. If ERP

implementation were not difﬁcult there would not be so many reports of the failure of

ERP implementations, or even the complete abandonment of systems.

One of the key issues in ERP implementation is what critical success factors (CSFs) should

be managed to increase the chances of a successful implementation. In this case, CSFs are those

things that the organization must ‘get right’ in order for the ERP system to work effectively.

Much of the research in this area has been summarized by Finney and Corbett

who distinguish

between the broad, organization-wide or strategic factors, and the more project speciﬁc, or

tactical, factors. These are shown in Table 14.2.

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Of course, some of these CSFs could be appropriate for any kind of complex implementa-

tion, whether of an ERP system or some other major change to an operation. But that is the

point. ERP implementation certainly has some speciﬁc technical requirements, but good ERP

implementation practice is very similar to other complicated and sensitive implementations.

Again, what is different about ERP is that it is enterprise-wide, so implementation should

always be considered on an enterprise-wide level. Therefore there will at all times be many

different stakeholders to consider, each with their own concerns. That is why implementing

an ERP system is always going to be an exercise in change management. Only if the anxieties

of all relevant groups are addressed effectively will the prospect of achieving superior system

performance be high.

Part Three Planning and control

416

Table 14.2 Strategic and tactical critical success factors (CSF) related to successful ERP

implementation

Strategic critical success factors

• Top management commitment and

support – strong and committed

leadership at the top management level

is essential to the success of an ERP

implementation

• Visioning and planning – articulating a

business vision to the organization,

identifying clear goals and objectives,

and providing a clear link between

business goals and systems strategy

• Project champion – the individual should

possess strong leadership skills as well

as business, technical and personal

managerial competencies

• Implementation strategy and time

frame – implement the ERP under a

time-phased approach

• Project management – the ongoing

management of the implementation plan

• Change management – this concept

refers to the need for the implementation

team to formally prepare a change

management programme and be

conscious of the need to consider the

implications of such a project. One key

task is to build user acceptance of the

project and a positive employee attitude.

This might be accomplished through

education about the beneﬁts and need

for an ERP system. Part of this building

of user acceptance should also involve

securing the support of opinion leaders

throughout the organization. There is

also a need for the team leader to

effectively negotiate between various

political turfs. Some authorities also

stress that in planning the ERP project,

it must be looked upon as a change

management initiative not an IT initiative

Based on Sherry Finney and Martin Corbett (2007) ERP implementation: a compilation and analysis of critical

success factors, Business Process Management Journal, vol. 13, no. 3, 329–47.

Tactical critical success factors

• Balanced team – the need for an implementation

team that spans the organization, as well as

one that possesses a balance of business and

IT skills

• Project team – there is a critical need to put in

place a solid, core implementation team that

is composed of the organization’s ‘best and

brightest’ individuals. These individuals should

have a proven reputation and there should be a

commitment to ‘release’ these individuals to the

project on a full-time basis

• Communication plan – planned communication

among various functions and organizational

levels (speciﬁcally between business and IT

personnel) is important to ensure that open

communication occurs within the entire

organization, as well as with suppliers and

customers

• Project cost planning and management – it is

important to know upfront exactly what the

implementation costs will be and dedicate the

necessary budget

• IT infrastructure – it is critical to assess the IT

readiness of the organization, including the

architecture and skills. If necessary,

infrastructure might need to be upgraded or

revamped

• Selection of ERP – the selection of an

appropriate ERP package that matches the

business’s processes

• Consultant selection and relationship – some

authorities advocate the need to include an ERP

consultant as part of the implementation team

• Training and job redesign – training is a critical

aspect of an implementation. It is also necessary

to consider the impact of the change on the

nature of work and the speciﬁc job descriptions

• Troubleshooting/crisis management – it is

important to be ﬂexible in ERP implementations

and to learn from unforeseen circumstances, as

well as be prepared to handle unexpected crisis

situations. The need for troubleshooting skills

will be an ongoing requirement of the

implementation process

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At a purely practical level, many consultants who have had to live through the difﬁculties of

implementing ERP have summarized their experiences. The following list of likely problems

with an ERP implementation is typical (and really does reﬂect reality).

● The total cost is likely to be underestimated.

● The time and effort to implement it is likely to be underestimated.

● The resourcing from both the business and the IT function is likely to be higher than

anticipated.

● The level of outside expertise required will be more than anticipated.

● The changes required to business processes will be greater than expected.

● Controlling the scope of the project will be more difﬁcult than expected.

● There will never be enough training.

● The need for change management is not likely to be recognized until it is too late, and the

changes required to corporate culture are likely to be grossly underestimated. (This is the

single biggest failure point for ERP implementations.)

Chapter 14 Enterprise resource planning (ERP)

417

Not only can ERP implementation go wrong, even when

undertaken by experienced professionals, sometimes it

can end up in the law courts. Waste Management, Inc. is

the leading provider of waste and environmental services

in North America. In 2008 it announced that it was suing

SAP (see earlier short case) over the failure of an ERP

implementation. Waste Management said that it was

seeking the recovery of more than $100 million in project

expenses as well as ‘the savings and beneﬁts that the SAP

software was promised to deliver to Waste Management’.

It said that SAP promised that the software could be fully

implemented throughout all of Waste Management within

18 months, and that its software was an ‘out-of-the-box’

solution that would meet Waste Management’s needs

without any customization or enhancements.

Waste Management signed a sales pact with SAP

in October 2005, but according to Waste Management,

‘Almost immediately following execution of the

agreements, the SAP implementation team discovered

Short case

What a waste!

signiﬁcant “gaps” between the software’s functionality

and Waste Management’s business requirements.

Waste Management has discovered that these gaps

were already known to the product development team in

Germany even before the SLA (service level agreement)

was signed.’ But members of SAP’s implementation

team had reportedly blamed Waste Management for

the functional gaps and had submitted change orders

requiring that Waste Management pay for ﬁxing them.

Summary answers to key questions

Check and improve your understanding of this chapter using self assessment questions

and a personalised study plan, audio and video downloads, and an eBook – all at

www.myomlab.com.

➤ What is ERP?

■ ERP is an enterprise-wise information system that integrates all the information from many

functions, that is needed for planning and controlling operations activities. This integration

around a common database allows for transparency.

➔

Source: Alamy Images

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Part Three Planning and control

418

■ It often requires very considerable investment in the software itself, as well as its implementa-

tion. More signiﬁcantly, it often requires a company’s processes to be changed to bring them

in line with the assumptions built into the ERP software.

➤ How did ERP develop?

■ ERP can be seen as the latest development from the original planning and control approach

known as materials requirements planning (MRP).

■ Although ERP is becoming increasingly competent at the integration of internal systems and

databases, there is the even more signiﬁcant potential of integration with other organizations’

ERP (and equivalent) systems.

■ In particular, the use of internet-based communication between customers, suppliers and

other partners in the supply chain has opened up the possibility of web-based integration.

➤ How should ERP systems be implemented?

■ Because ERP systems are designed to address problems of information fragmentation imple-

mentation will be complex and cross organizational boundaries.

■ There are a number of critical success factors (CSFs) that the organization must ‘get right’ in

order for the ERP system to work effectively. Some of these are broad, organization-wide, or

strategic, factors. Others are more project-speciﬁc, or tactical, factors.

Peter Townsend knew that he would have to make some

decisions pretty soon. His sports goods manufacturing busi-

ness, Psycho Sports, had grown so rapidly over the last

two years that he would soon have to install some sys-

tematic procedures and routines to manage the business.

His biggest problem was in manufacturing control. He had

started making specialist high-quality table tennis bats but

now made a wide range of sports products, including tennis

balls, darts and protective equipment for various games.

Furthermore, his customers, once limited to specialist sports

shops, now included some of the major sports retail chains.

‘We really do have to get control of our manufacturing.

I keep getting told that we need what seems to be called

an MRP system. I wasn’t sure what this meant and so I have

bought a specialist production control book from our local

bookshop and read all about MRP principles. I must admit,

these academics seem to delight in making simple things

complicated. And there is so much jargon associated with

the technique, I feel more confused now than I did before.

Perhaps the best way forward is for me to take a very

simple example from my own production unit and see

Case study

Psycho Sports Ltd

Source: Corbis/Mark Cooper

M14A_SLAC0460_06_SE_C14A.QXD 10/20/09 9:46 Page 418

whether I can work things out manually. If I can follow the

process through on paper then I will be far better equipped

to decide what kind of computer-based system we should

get, if any!’

Peter decided to take as his example one of his new

products: a table tennis bat marketed under the name of

‘the high-resolution’ bat, but known within the manufactur-

ing unit more prosaically as Part Number 5654. Figure 14.5

shows the product structure for this table tennis bat, show-

ing the table tennis bat made up of two main assemblies:

a handle assembly and a face assembly. In order to bring

the two main assemblies together to form the ﬁnished bat,

various ﬁxings are required, such as nails, connectors, etc.

The gross requirements for this particular bat are shown

below. The bat is not due to be launched until Week 13 (it

is now Week 1), and sales forecasts have been made for

the ﬁrst 23 weeks of sales:

Weeks 13–21 inclusive, 100 per week

Weeks 22–29 inclusive, 150 per week

Weeks 30–35 inclusive, 200 per week.

Peter also managed to obtain information on the current

inventory levels of each of the parts which made up the

ﬁnished bat, together with cost data and lead times. He

was surprised, however, how long it took him to obtain this

information. ‘It has taken me nearly two days to get hold of

all the information I need. Different people held it, nowhere

was it conveniently put together, and sometimes it was not

even written down. To get the inventory data, I actually had

to go down to the stores and count how many parts were

in the boxes.’

The data Peter collected were as shown in Table 14.3.

Peter set himself six exercises which he knew he would

have to master if he was to understand fully the basics of

MRP.

Exercise 1

Draw up:

(a) the single-level bill of materials for each level of

assembly;

(b) a complete indented bill of materials for all levels of

assembly.

Exercise 2

(a) Create the materials requirements planning records

for each part and sub-assembly in the bat.

Chapter 14 Enterprise resource planning (ERP)

419

Figure 14.5 Product structure for bat 5654

Table 14.3 Inventory, cost and lead-time information for parts

Part no. Description Inventory EQ LT Std cost

5645 Bat 0 500 2 12.00

0499 Handle assy 0 400 3 4.00

7754 Shaft 15 1,000 5 1.00

0955 Connector 350 5,000 4 0.02

9110 Nail 120 5,000 4 0.01

8744 Rivet 3,540 5,000 4 0.01

0772 Face assy 0 250 4 5.00

1821 Handle 0 500 4 2.00

6511 Rubber face 0 2,000 10 0.50

2547 Wooden inner 10 300 7 1.50

8561 Foam panel 0 1,000 8 0.50

LT = lead time for ordering (in weeks); EQ = economic quantity for ordering; Std cost = standard cost in £.

➔

M14A_SLAC0460_06_SE_C14A.QXD 10/20/09 9:46 Page 419

(b) List any problems that the completed MRP records

identify.

to solve any problems? What are their relative merits?

Exercise 3

Based on the ﬁrst two exercises, create another set of

MRP records, this time allowing one week’s safety lead

time for each item: that is, ensuring the items are in stock

the week prior to when they are required.

Exercise 4

Over the time period of the exercise, what effect would the

imposition of a safety lead time have on average inventory

value?

Exercise 5

If we decided that our ﬁrst task was to reduce inventory

costs by 15 per cent, what action would we recommend?

What are the implications of our action?

Exercise 6

How might production in our business be smoothed?

Questions

1 Why did Peter have such problems getting to the

relevant information?

2 Perform all the exercises which Peter set for

himself. Do you think he should now fully understand

MRP?

Part Three Planning and control

420

These problems and applications will help to improve your analysis of operations. You

can ﬁnd more practice problems as well as worked examples and guided solutions on

MyOMLab at

www.myomlab.com.

Your company has developed a simple, but amazingly effective, mango peeler. It is constructed from a

blade and a supergrip handle that has a top piece and a bottom piece. The assembled mango peeler is

packed in a simple recycled card pack. All the parts simply clip together and are bought in from suppliers,

who can deliver the parts within one week of orders being placed. Given enough parts, your company can

produce products within a day of ﬁrm orders being placed. Initial forecasts indicate that demand will be

around 500 items per week. (Read the supplement to this chapter before attempting this and the following

question.)

(a) Draw a component structure and Bill of Materials for the mango peeler.

(b) Develop a Master Production Schedule for the product.

tells you that the economic order quantity, EOQ, for all parts is 2,500).

The mango peeler described above was a huge success. Demand is now level at 800 items per week. You

now have also developed two further products, a melon baller and a passion fruit pulper. Both new products

use the same handle, but have their own specially designed handle and pack. Demand for the new products

is expected to be 400 items per week. Also your suppliers have indicated that, because of the extra demand,

they will need two weeks to deliver orders. Similarly, your own assembly department is now taking a week to

assemble the products.

(a) Draw new component structures and Bills of Material for the new products.

(b) Develop a Master Production Schedule for all the products.

Using a cookery book, choose three similar, fairly complex, recipe items such as layered and decorated gateaux

(cakes) or desserts. For each, construct the indented bill of materials and identify all the different materials,

sub-assemblies and ﬁnal products with one set of part numbers (i.e. no duplication). Using the times given in

the recipes (or your own estimates), construct a table of lead times (e.g. in minutes or hours) for each stage of

production and for procurement of the ingredients. Using these examples (and a bit of your own imagination!),

show how this information could be used with an MRP system to plan and control the batch production

processes within a small cake or dessert factory making thousands of each product every week. Show part

of the MRP records and calculations that would be involved.

Problems and applications

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(Advanced) Working in a small study group, construct a model of the information systems that you think would

be needed to plan and control the most important day-to-day operations and ﬁnances of a large university or

college. In particular, identify and include at least three processes that cross departmental and functional

boundaries, and show how ERP might be used to improve the quality, speed, dependability, ﬂexibility and/or

costs of such processes. Then discuss:

(a) If ERP is not already in use at your chosen organization, should it be introduced, and if so why? What

would the difﬁculties be in doing this, and how could they be overcome?

(b) If ERP is already in use, what advantages and disadvantages are already apparent to the staff (e.g. ask

a lecturer, an administrator, and a support services manager, such as someone who runs cleaning or

catering services)?

Chapter 14 Enterprise resource planning (ERP)

421

Davenport, T.H. (1998) Putting the enterprise into the

enterprise system, Harvard Business Review, July–August.

Covers some of the more managerial and strategic aspects

of ERP.

Finney, S. and Corbett, M. (2007) ERP implementation: a

compilation and analysis of critical success factors, Business

Process Management Journal, vol. 13, no. 3, 329–47. Both

interesting and practical.

Koch, C. and Wailgum, T. (2007) ERP deﬁnition and solutions,

www.cio.com. CIO.com has some really useful articles and

this is one of the most thought-provoking.

Turbit, N. (2005) ERP Implementation – The Traps, The Project

Perfect White Paper Collection, www.projectperfect.com.au.

Practical (and true).

Vollmann, T., Berry, W., Whybark, D.C. and Jacobs, F.R.

(2004) Manufacturing Planning and Control Systems for Supply

Chain Management: The Deﬁnitive Guide for Professionals,

McGraw-Hill Higher Education. The latest version of the

‘bible’ of manufacturing planning and control. Explains the

‘workings’ of MRP and ERP in detail.

Wallace, T.F. and Krezmar, M.K. (2001) ERP: Making it

Happen, Wiley. Another practitioner guide but with useful

hints on the interior mechanisms of MRP.

Selected further reading

www.bpic.co.uk/ Some useful information on general plan-

ning and control topics.

www.cio.com/research/erp/edit/erpbasics.html Several

descriptions and useful information on ERP-related topics.

www.erpfans.com/ Yes, even ERP has its own fan club! Debates

and links for the enthusiast.

www.sap.com/index.epx ‘Helping to build better businesses for

more than three decades’, SAP has been the leading worldwide

supplier of ERP systems for ages. They should know how to

do it by now!

www.sapfans.com/ Another fan club – this one is for SAP

enthusiasts.

www.apics.org. The American professional and education

body that has its roots in planning and control activities.

www.opsman.org Lots of useful stuff.

Useful web sites

Now that you have ﬁnished reading this chapter, why not visit MyOMLab at

www.myomlab.com where you’ll ﬁnd more learning resources to help you

make the most of your studies and get a better grade?

M14A_SLAC0460_06_SE_C14A.QXD 10/20/09 9:46 Page 421

Supplement to

Chapter 14

Materials requirements

planning (MRP)

Introduction

Materials requirements planning (MRP) is an approach to calculating how many parts or

materials of particular types are required and what times they are required. This requires

data ﬁles which, when the MRP program is run, can be checked and updated. Figure S14.1

shows how these ﬁles relate to each other. The ﬁrst inputs to materials requirements plan-

ning are customer orders and forecast demand. MRP performs its calculations based on the

combination of these two parts of future demand. All other requirements are derived from,

and dependent on, this demand information.

Figure S14.1 Materials requirements planning (MRP) schematic

Master production schedule

The master production schedule (MPS) forms the main input to materials requirements

planning and contains a statement of the volume and timing of the end-products to be made.

It drives all the production and supply activities that eventually will come together to form

the end-products. It is the basis for the planning and utilization of labour and equipment,

and it determines the provisioning of materials and cash. The MPS should include all sources

of demand, such as spare parts, internal production promises, etc. For example, if a manu-

facturer of earth excavators plans an exhibition of its products and allows a project team

to raid the stores so that it can build two pristine examples to be exhibited, this is likely to

leave the factory short of parts. MPS can also be used in service organizations. For example,

in a hospital theatre there is a master schedule that contains a statement of which operations

are planned and when. This can be used to provision materials for the operations, such as

the sterile instruments, blood and dressings. It may also govern the scheduling of staff for

operations.

M14B_SLAC0460_06_SE_C14B.QXD 10/20/09 9:47 Page 422

The master production schedule record

Master production schedules are time-phased records of each end-product, which contain

a statement of demand and currently available stock of each ﬁnished item. Using this

information, the available inventory is projected ahead in time. When there is insufﬁcient

inventory to satisfy forward demand, order quantities are entered on the master schedule

line. Table S14.1 is a simpliﬁed example of part of a master production schedule for one item.

In the ﬁrst row the known sales orders and any forecast are combined to form ‘Demand’.

The second row, ‘Available’, shows how much inventory of this item is expected to be in

stock at the end of each weekly period. The opening inventory balance, ‘On hand’, is shown

separately at the bottom of the record. The third row is the master production schedule, or

MPS; this shows how many ﬁnished items need to be completed and available in each week

to satisfy demand.

Chase or level master production schedules

In the example in Table S14.1, the MPS increases as demand increases and aims to keep avail-

able inventory at 0. The master production schedule is ‘chasing’ demand (see Chapter 11)

and so adjusting the provision of resources. An alternative ‘levelled’ MPS for this situation

is shown in Table S14.2. Level scheduling involves averaging the amount required to be

completed to smooth out peaks and troughs; it generates more inventory than the previous

MPS.

Available to promise (ATP)

The master production schedule provides the information to the sales function on what can

be promised to customers and when delivery can be promised. The sales function can load

known sales orders against the master production schedule and keep track of what is avail-

able to promise (ATP) (see Table S14.3). The ATP line in the master production schedule

shows the maximum that is still available in any one week, against which sales orders can be

loaded.

Supplement to Chapter 14 Materials requirements planning (MRP)

423

Table S14.1 Example of a master production schedule

Week number

123456789

Demand 10 10 10 10 15 15 15 20 20

Available 20 10 0 000000

MPS 0 0 10 10 15 15 15 20 20

On hand 30

Table S14.2 Example of a ‘level’ master production schedule

Week number

123456789

Demand 10 10 10 10 15 15 15 20 20

Available 31 32 33 34 30 26 22 13 4

MPS 11 11 11 11 11 11 11 11 11

On hand 30

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