REPORT OF PRODUCTION PLANNING

Gisella M. Macias

Professor Edwin Desintonio

Production

10 February 2016

REPORT OF PRODUCTION PLANNING

This report is about to present the production plan of a company that has three different production lines and in each 5 types of products are produced. The company makes an aggregate plan every November for the following year, but requires to be updated in January, for this we have information on sales of the previous year; costs and capacity constraints.

It also requires the preparation of master production plans for a horizon of two months, from the information obtained in November last year; the master plan must be analyzed to see if it is feasible. From the MPS aims to deploy the MRP and material requirements planning for planning release orders. The company is also concerned about the sequencing of orders, so I will proceed to try different sequencing rules, aiming to minimize delays in delivering orders.

In preparing the plan a forecast for 2016 was based on sales last year, methods of moving average (2 periods) and exponential smoothing with a rate of smoothing used 0.2 and 0.7; these methods were evaluated with the help of MAD and MAPE resulting that the most convenient method was moving average of 2 periods as show in table 1, this method was performed statistical control from control cards with limits of three standard deviation.

From the forecast I made the aggregate plan of the three lines, as employees could be transferred between lines from one period to another, one plan was performed for the three lines through the use of linear programming. To prepare the plan is assumed that each month had four weeks, was taken into account that in January the number of workers is the same as December last year, a safety stock of two weeks for each month is also maintained and met restrictions on staff and capacity. The result obtained through the Excel Solver tool was to hire 5 employees in February and work with them throughout the year, and use overtime in January, March, April, May, October and November, months where there is more demand; with this model the minimum production cost is obtained as shown in the table 2.

I made the master production plan of line 1 for the months of January and February from the information obtained in November last year, the costs of maintaining inventory and order were supposed to use the lot sizing techniques (Part Period balancing, Wagner-Within, EOQ, Fixed Period Order, producing minimum), which were assigned to the five products in the line 1.

Analysis capacity of the line 1 with information from the four workplaces (time, sequence, capacity constraints, etc.) was performed, but no positive results were obtained because the company does not have sufficient capacity to meet the MRP planned; 3 shifts were made to see if it could meet the required load but was still overloaded, so the best option is to prioritize orders that are most important to deliver, and make work in more weeks with 3 shifts; if needed to deliver on time, the company should outsource to a company to achieve compliance with the plan.

The company is concerned about the sequencing of orders, so it has been decided to try with different sequencing rules to see which works best, for it was calculated processing day  in January and the remaining time for delivery of the product, in order to calculate the delay in the different methods and choose the one with fewer days late, I tested with Short production time, earliest due date and critical ratio; at the end  the method with least delay was the short production time as shown in the table 3, so the company should use this method. The sequence was also performed with the Johnson’s rule and different sequence was obtained from the previous rules.

Using planning tools has been achieved scheduling production of different products that made the company, from a long-term to a short-term planning, the use of these tools helps the programmer to be guided on what to produce and taken decisions in case of not having enough capacity to produce the required load in the company, we knew that eventually we fail to meet the required load, this is because with 4 workplaces does not meet demand , so the company needs to add another workplace to distribute load if it wants to improve and maintain demand that the company has at the moment because with 3 shifts is not enough.

ANEXOS

TABLE 1. Muestra de la MAD Y MAPE en Línea 1

TABLE 2.Agregate planning 2016

...