Master Production Schedule and Demand Management
Demand management vs the MPS
Demand management gathers every source of demand - forecasts, customer orders, intercompany and branch demand, service parts, promotional builds. The MPS then states what the company plans to build, in what quantity, and when, at end-item or planning-bill level. The horizon must cover at least the cumulative lead time, or MRP releases orders that cannot be fulfilled.
Forecast consumption
Forecasts and firm customer orders coexist; orders must consume the forecast so demand is not counted twice. Consuming backward from the due date is the usual rule, with a defined consumption window. Firm planned orders and frozen MPS rows protect near-term stability.
Available-to-promise
ATP tells sales what remains uncommitted. Discrete ATP at a period with an MPS receipt equals on-hand plus that receipt minus customer orders up to the next receipt. Cumulative ATP carries the balance forward instead of resetting it.
Worked example
On hand 50. MPS receipts: 100 in week 1, 100 in week 3. Customer orders: 60 (wk1), 40 (wk2), 20 (wk3), 10 (wk4). Week-1 discrete ATP = 50 + 100 − 60 − 40 = 50. Week-3 ATP = 100 − (20 + 10) = 70, because no further receipt exists in the horizon. The 50 in week 1 is promiseable now; the 70 only after week 3's receipt arrives.
Traps
Adding forecast and orders rather than consuming one with the other. Quoting cumulative ATP when the customer needs delivery before the next receipt. Setting the horizon shorter than cumulative lead time. Building the MPS on an item that cannot be exploded - modular products need a planning bill or two-level master schedule.