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Receipt sample template for Operations

welcome to the video on master production schedule in this video we will look at an example of how to create the mps record in this example we have taken item x y z we have been given that the minimum order quantity to be manufactured is 60 units at one shot and the lead time to manufacture the item is two weeks we have also been given that the beginning inventory that is inventory before week one is 35 units now we have week one till week eight and we have been given the forecast for the item and the customer orders booked for the item and we need to put together the mps plan so what that means is when is the mps quantity required to be received by this manufacturing unit and in order to do that when does the company require to start the production so let's first identify the projected on hand quantity for each of these weeks so let's look at the formula for calculating projected on and quantity so the formula for finding out the projected on hand inventory at the end of a period is on hand inventory in the last period that is what was the on inventory when you started this current period plus the mps quantity due this period that means what is the mps quantity that you are going to receive in this period minus the projected requirements in this period so this is nothing but you have this supply inventory and mps and from that supply you are reducing your demand which is projected requirement in this period so now with this formula let us try to find out the projected on hand quantity available for each of these weeks so let's take week one so for week one the on and maintain last period is 35 so this becomes 35 plus mps quantity due this period which is zero so there is nothing we are receiving minus the projected requirements this period so as we have seen in the fundamentals of mps we will take the larger of the forecast and customer orders booked in order to avoid shortage so we will take 17 in this case so this becomes 35 plus 0 minus 17 and this equals to 18 so 18 is the ending inventory for week one now let's go to week two so for week two we will have one inventory in last period is 18 plus mps quantity due this period is 0 minus the demand which is greater than or 2 which is 16 so this becomes 2 so here we mentioned now week 3 so 2 plus 0 minus 25 so this becomes minus 23 so minus 23 here minus indicates that there is a shortage so we are not able to meet the demand so what this means is that we have to increase our supply so what this means is that we need to receive an mps quantity in this week in order to meet the demand now the minimum quantity required to be manufactured as per the order policy is 60 units so let's take 60 as the mps quantity to be received in week 3. now if we have to receive these 60 units in week 3 we need to start manufacturing it two weeks ahead of time so if you have to receive the quantity in week three we need to start manufacturing this two weeks ahead of time as we have been given that the lead time is two weeks so two weeks prior to week three is week one that means we have to start manufacturing 60 in week one now let's again calculate the projected on hand inventory for week three so we have the inventory from previous period is two plus mps is 60 minus 25 so this becomes 37 so the projected inventory at the end of week 3 is 37 now let's go to week 4 so 37 plus 0 minus 25 so this becomes 12 so here we write 12. now for week 5 12 plus 0 minus so here the demand is 20 20 is the larger of the two so 20 and this becomes minus 8. so again minus sign indicates that there is a shortage that means we need to get an mps quantity here so this becomes 60 and we need to manufacture this two weeks per hour so we need to start manufacturing in week three now again let's calculate the projected on hand for week five so 12 plus 60 minus 20 so this is 72 minus 20 which is 52. so 52 comes here now for week 6 52 plus 0 minus 27 so this becomes 25 so 25 here now again for week 7 25 plus 0 minus 30 so this becomes minus 5. now again this is a shortage here so we need to get mps quantity here and we need to start manufacturing two weeks prior now again let's calculate for week seven so 25 is the ending inventory for week 6 plus 60 minus 30. so this becomes 85 minus 30 which is 55 so 55 is the ending inventory for week 7 and week 8 is 55 plus 0 minus 35 so this becomes 20 units so 20 comes here so this is the mps plan for item xyz from week one through week eight and as per this plan we have to start manufacturing sixty units in week 1 60 units in week 3 and 60 units in week 5.