Prepared by Dr. Ratna Babu Chinnam for IE 7315: Production Systems at Wayne State University
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Prepared by Dr. Ratna Babu Chinnam for IE 7315: Production Systems at Wayne State University
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Bill of Materials
Routing
Order review and release
Priority setting
Production capacity
Variability in production
Work in process
Queuing
Inventory costs
Customer service
Forecasting
Master production scheduling (MPS)
Material requirements planning (MRP)
Capacity requirements planning (CRP)
After playing the game for a while you may wish to have some sort of computer support to make your decisions. You can create this
for yourself. Past data may be used for forecasting, which leads to a MPS, and this MPS, when broken into the components through
MRP, should help you in deciding how many parts / products to order and when. A CRP module can help you decide how much
overtime to order. Your specific assignment is to create a decision support system (DSS) using these concepts. Follow the following
instructions exactly as given.
Guidelines for Completing the Assignment
Step 1. Familiarise yourself with the simulator. Play the game in an ad-hoc manner, guessing the decisions.
What is the highest profit you made while playing in an ad-hoc manner? ________________
Step 2. Play the game on a reorder point basis. The idea of a reorder point (ROP) is to set a minimum level of inventory at which you
order inventories, choosing your own order size. Try different ROPs and order sizes. Enter your best reorder policy:
Item
Alpha
Beta
Comma
Delta
Epsilon
Fi
Gamma
Reorder point
Order size
What is the highest profit you made while playing on a reorder point basis? ________________
Step 3. The next step is playing the game with a DSS, built by you. To do this, you need a forecasting model to forecast demand of
products Alpha and Beta. This should be fed into the master production schedule (MPS) of the MRP worksheet. Next you need to
explode this MPS into the MRP, which will then tell you what order to release each week. When you create the CRP model from the
MRP model, you can decide how much overtime to use.
Remember though, that the decision support system is there to help in decision-making. It suggests things for you to do,
but it does not dictate your decisions. You can override it any time.
Here are the steps to create the DSS.
A. Forecasting. I suggest you use linear regression for forecasting. Use the menu item Tools | Data Analysis | Regression. The YRange is of course the demand, and the X-Range is the number of weeks. Use the output of this analysis to create your forecast.
Prepared by Dr. Ratna Babu Chinnam for IE 7315: Production Systems at Wayne State University
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The forecast formula is: Intercept + (X Variable 1) * (Number of weeks). This should create the forecast up to week 35. You need to
forecast the demand for both Alpha and Beta.
B. Master Production Scheduling. You need to link your forecasts to the MPS (in the worksheet MRP). Use the VLOOKUP
function provided in EXCEL to do this. This function will look up from the forecast table (called Forecast1 and Forecast2 for Alpha and
Beta respectively) appropriate Forecast (column D) and insert into the MPS table. (Hint: You need to insert something like
VLOOKUP (week, Forecast1, column No.) into the MPS).
The scheduled receipt row needs to be linked to the appropriate work-in-process information in the Main Screen. The current on
hand needs to be linked obviously to the current inventory from the Main Screen.
C. Material Requirements Planning. The MRP explosion should of course be based on the BOM. Do your work in the worksheet
MRP. Make sure the gross requirements are always derived from the parent, not necessarily from the finished product. I suggest you
use the lot for lot policy for all MRP explosions, with a lead-time of one week.
D. Capacity Requirements Planning. The CRP should be based on the Routing information in the workbook. Combine the
requirements of work for each of the work centres. Make sure you take into account the work requirements for order in progress
(scheduled receipts). I suggest you use the full work requirements for these.
E. Decision Support System. The summary information at the bottom of the worksheet summarises the order releases for the
current week. The overtime should come from CRP, if more than the available 40 hours are needed. Insert the appropriate formulas
to gather this information from the appropriate places. Your DSS is now complete. You can now use this DSS when using the button
Make/Alter Decisions to make your decisions. The Use MRP button will get the order releases and the overtimes from the MRP
worksheet. Remember though that this is always just a suggestion, you can change the decisions manually particularly in view of
the component availabilities and work-in-progress.
F. Play! See if your DSS is any good. Play the game using your MRP models to make the decisions.
What is the highest profit you made while playing with your DSS? ________________
Prepared by Dr. Ratna Babu Chinnam for IE 7315: Production Systems at Wayne State University
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