Question

Describe a master production schedule (MPS) and compute available-to-promise quantities.

Answer 1

The MPS in an organization forms the basis of communication between sales and manufacturing. Using the MPS as a contract between sales and production means that sales can make valid order promises. MPS is a dynamic plan and can be changed when there are changes in demand or capacity. It decides what products are manufactured and when
MPS integrated with an ERP helps in planning, extracting actual supply and demand data, forecasting, delivering accurate and timely production plans that help manufacturers achieve their production objectives and reduce costs.

The functions of Master Production Schedule are:
1.   To translate aggregate plans into specific end items
2.   Evaluate alternative schedules
3.   Generate material requirement:
4.   Generate capacity requirements:
5.   Facilitate information processing
6.   Effective utilization of capacity
The inputs to MPS are
•   Capacity constraint
•   Production Policies
•   Product Characteristics
•   Planned Orders
•   Forecast demand
•   Current and planned
•   Availability
•   Planning Horizon
•   Calendar

Output of MPS
•   When and how much to produce each product
•   Capacity planning

Available-to-Promise is a report for each MPS line item. The report is time-phased, and reports are generated monthly

Its is a tool used to show the inventory that is not reserved for existing customer orders and is available for the sales team to Promise to other customers
The Available to Promise formula is:

on hand = quantity on hand
supply = planned orders,
demand = sales orders, component demand