CPIM - Master Planning of Resources
1. Principles of Demand Management: How to plan and use resources with profitable
business results
Planning Hierarchy
Customer/Supplier Objectives
Demand Planning Process
Demand Management
Activities
Manufacturing Process Types and Environments
How Forecasts are Created and Used
Data Reliability
2. Linkage between organization's strategic/business plans and master plan-
ning of resources: Information from MPR will continually feed up to the strategic management of
resources done by senior management and will be used to improve and refine manufacturing processes over
time.
3. Functions and Components of the manufacturing planning hierarchy - De-
mand Management: Demand Management - The function of recognizing all demands for goods and
services to support the marketplace.
4. Functions and Components of the manufacturing planning hierarchy - Distri-
,bution Planning: Distribution Planning - The planning activities associated with transportation,
warehousing, inventory levels, materials handling, order administration, etc. to support distribution.
5. Functions and Components of the manufacturing planning hierarchy - Sales
and Operations Planning: Sales and Operations Planning - A process to develop tactical plans that
provide management the ability to strategically direct its businesses to achieve competitive advantage. Brings
together all plans into one integrated set of plans.
6. Functions and Components of the manufacturing planning hierarchy - Re-
source Planning: Resource Planning - Capacity planning conducted at the business plan level. The
process of establishing, measuring, and adjusting limits or levels of long-range capacity. Requires top
management approval
, 7. Functions and Components of the manufacturing planning hierarchy -
Master Scheduling: Master Scheduling - The process where the master schedule is generated and
reviewed and adjustments are made to the master production schedule to ensure consistency with the production
plan. The master production schedule (the line on the grid) is the primary input to the material requirements plan. The
sum of the master production schedules for the items within the product family must equal the production plan for
that family.
8. Functions and Components of the manufacturing planning hierarchy -
Rough-cut Capacity Planning: Rough-cut Capacity Planning - The process of converting the master
production schedule into requirements for key resources often including labor, machinery, warehouse space,
suppliers' capabilities, and, in some cases, money.
9. Key Forecasting Concepts: Forecast must match the nature of the decision
The forecast model selected should not be any more complicated than necessary. Simpler is better.
Data put in, and the forecast that comes out, should be monitored on a routine basis for appropriateness and quality.
10. Criteria used in selection of forecasting method: Complete versus incomplete data. If
all the required sales data for a particular item as well as the causal variables are available, then the data are
considered complete. Incomplete data would have limited—or even an absence of—sales data for a particular
product or not have the causal variables identified.
Stable versus unstable data. Stable data have a distinct pattern such as seasonality or trends. There's a randomness
and no distinct pattern to unstable data.
11. Qualitative Forecasting: An approach to forecasting that is based on intuitive or judgmental evaluatio
It is used generally when data is scarce, not available, or no longer relevant.
12. Quantitative Forecasting: An approach to forecasting where historical demand data is used to project
future demand. Extrinsic and intrinsic techniques are typically used.
13. How to Evaluate forecast performance: Measure forecast error - the ditterence between
actual demand and forecast demand, stated as an absolute value or as a percentage.
14. Forecast Error: Absolute Value
|A-F|
A = Actual demand
1. Principles of Demand Management: How to plan and use resources with profitable
business results
Planning Hierarchy
Customer/Supplier Objectives
Demand Planning Process
Demand Management
Activities
Manufacturing Process Types and Environments
How Forecasts are Created and Used
Data Reliability
2. Linkage between organization's strategic/business plans and master plan-
ning of resources: Information from MPR will continually feed up to the strategic management of
resources done by senior management and will be used to improve and refine manufacturing processes over
time.
3. Functions and Components of the manufacturing planning hierarchy - De-
mand Management: Demand Management - The function of recognizing all demands for goods and
services to support the marketplace.
4. Functions and Components of the manufacturing planning hierarchy - Distri-
,bution Planning: Distribution Planning - The planning activities associated with transportation,
warehousing, inventory levels, materials handling, order administration, etc. to support distribution.
5. Functions and Components of the manufacturing planning hierarchy - Sales
and Operations Planning: Sales and Operations Planning - A process to develop tactical plans that
provide management the ability to strategically direct its businesses to achieve competitive advantage. Brings
together all plans into one integrated set of plans.
6. Functions and Components of the manufacturing planning hierarchy - Re-
source Planning: Resource Planning - Capacity planning conducted at the business plan level. The
process of establishing, measuring, and adjusting limits or levels of long-range capacity. Requires top
management approval
, 7. Functions and Components of the manufacturing planning hierarchy -
Master Scheduling: Master Scheduling - The process where the master schedule is generated and
reviewed and adjustments are made to the master production schedule to ensure consistency with the production
plan. The master production schedule (the line on the grid) is the primary input to the material requirements plan. The
sum of the master production schedules for the items within the product family must equal the production plan for
that family.
8. Functions and Components of the manufacturing planning hierarchy -
Rough-cut Capacity Planning: Rough-cut Capacity Planning - The process of converting the master
production schedule into requirements for key resources often including labor, machinery, warehouse space,
suppliers' capabilities, and, in some cases, money.
9. Key Forecasting Concepts: Forecast must match the nature of the decision
The forecast model selected should not be any more complicated than necessary. Simpler is better.
Data put in, and the forecast that comes out, should be monitored on a routine basis for appropriateness and quality.
10. Criteria used in selection of forecasting method: Complete versus incomplete data. If
all the required sales data for a particular item as well as the causal variables are available, then the data are
considered complete. Incomplete data would have limited—or even an absence of—sales data for a particular
product or not have the causal variables identified.
Stable versus unstable data. Stable data have a distinct pattern such as seasonality or trends. There's a randomness
and no distinct pattern to unstable data.
11. Qualitative Forecasting: An approach to forecasting that is based on intuitive or judgmental evaluatio
It is used generally when data is scarce, not available, or no longer relevant.
12. Quantitative Forecasting: An approach to forecasting where historical demand data is used to project
future demand. Extrinsic and intrinsic techniques are typically used.
13. How to Evaluate forecast performance: Measure forecast error - the ditterence between
actual demand and forecast demand, stated as an absolute value or as a percentage.
14. Forecast Error: Absolute Value
|A-F|
A = Actual demand
