C720 Section 5: Forecasting, Scheduling, and Planning Systems key terms

Aggregate planning

combining of individual end items into products groups. medium range (6-18 months)

Bill of materials (BOM)

lists materials and quantities needed to produce finished product

Capacity requirements planning (CRP)

method used after MRP to calculate required workload time

Cycle time

controls flow along assembly line and determines assembly capacity

Daily dispatch list

what sequence to complete the production jobs

Delphi technique

Panel of experts

Demand time fence (DTF)

frozen zone

Dependent demand

demand for an item generated by company production process based on associated independent demand item

Enterprise resource planning (ERP)

software system that helps manage/integrate core business processes

Exponential smoothing

procedure to continually revise estimates to include more recent data by averaging past values

Forecast(ing)

project future sales, costs, more by examining past experiences for insight

Forecast error

difference between what actually happens and what is predicted

Frozen zone

time which MPS cant be altered (no new orders) to avoid disruptions to resources

Independent demand

demand not controlled by company

Long-range planning

facilities to build, location, capacity, type of process, technologies

Manufacturing resource planning (MRP II)

integrate data from shop floor, distribution systems, finance, HR, engineering

Master production schedule (MPS)

disaggregates the aggregate plan because it is specific statement of exact production

Master schedule

details how much needs to be produced within certain period (2-3 month)

Material requirements planning

generates plan for ordering all components needed to meet MPS demand

Mean squared error (MSE)

average of all squared errors

Medium range planning

develops ways to utilize resources to meet customer demand. (6-18 months)

Panel of experts (qualitative)

comprised of people knowledgeable about subject attempts to build forecast

Planning horizon

length of time a company uses as basis for developing a plan

Planning time fence (PTF)

period when master scheduler can adjust MPS as needed without disrupting production

Purchase order

planned order release generated by MRP that is an authorization for a vendor to supply parts

Pyramid forecasting (qualitative)

rolling sales forecast from lowest to highest level where forecast is totaled, then separated into parts and force down to all levels

Qualitative forecast methods

based on subjective interpretation

Quantitative forecast methods

based on numerical data

Run-out time

how long it will take to run out of each product at current usage rates

run-out time = current inventory / usage rate

Scheduling

coordinating work tasks, people, materials, facilities, equipment

Scheduling for peak demand

ensuring facilities are prepared to handle ops at highest production flow

Shop order

planned order release generated by MRP that authorizes production to make a certain component

Scheduling for chase demand

organizing reactionary process to peak times without having extra parts standing in wait

Simple moving average (SMA) (quantitative)

forecast for next period is equal to average of recent periods, used to smooth peak and valleys in data.

SMA = A1 + A2 + A3 / n

A = actual period in past periods

n= number of periods to be averaged

Survey method (qualitative)

elicit info conducted via questionnaire, phone interview, internet

Test market (qualitative)

arranges placement of a new product in representative market city

Time bucket

period of time (1 week), where demand and requirements are grouped for master scheduling

Time fences

boundaries between periods in planning horizon of MPS

Weighted moving average (quantitative)

assigns different weights to each period