Levels of planning in manufacturing systems

Long-term forecast

Firm Orders Resource planning Aggregate planning

Product details
Rough-cut capacity planning (RCCP) Master production schedule (MPS)

Short term forecasts

Bills of Material (BoM)

Materials Requirement Planning (MRP) Routing data

On-hand inventory position

When I will issue purchase order for the supplier. Start the production proccesses
Short term Planning and control

Planned order releases

Capacity Requirement Planning (CRP)

Job dispatching & scheduling

Job release

Forecasting (chapter 2)
Usually is the job of the marketing team A forecast is an inference of what is likely to happen in the future.

1) Technological forecast
Moores law: Number of transistors in ICs will double every 18 months or 2 years

2) Economic forecasts

3) Demand forecast (our focus in this course)

Eternal effects
Business Cycles Product Lifecycle Customers Plans Competitors Effort &Prices Time of the year
Output

The Company

Demand
Quality of product & service

Effects on company

Company Efforts

Advertising

Product Design

Reputation

Internal effects

Forecasting techniques
1) Qualitative a. Delphi method: Ask several independent experts. b. Jury of executives: Ask company executives in meetings. c. Users expectations: Using questionnaires, surveys, samples, etc 2) Quantitative ( ), how many cars are produced, how many wind shields is demanded a. Causal: ( ), neglects all other factors as they all change with time (our focus) b. Time-series model:

Time-series model

We always assume that data trends repeat itself

Forecasting model evaluation

Where n is the number of historical data points used for model validation

| |

1) Moving average
( )

( )

Example 5-month MA Month (t) 1 2 3 4 5 6 7 8 9 10 11 12 13 52 48 36 49 65 54 60 48 51 62 66

( )

AVG(1+2+3+4+5)=50 AVG(2+3+4+5+6)=50.4

50 50.4 52.8 55.2 55.6 55.0 57.4 57.4

2) Weighted moving average

( )

3) Exponential smoothing
( )

Example Month (t) 1 2 3 4 5 6 7 8 9 10 11 12 13 50 (given) 49.82 45.67 46.67

52 48 36 49 65 54 60 48 51 62 66

4) Regression analysis
[ ]

5) Double exponential smoothing

: Estimated intercept in period t : Estimated slope on period t

( (

)( ( )