Inventory Control Guide Page 2
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401. Framework of planning decisions
Let us first remember where the inventory control decisions may take place.
Corporate
Strategic
Planning
Business
Product and
Financial
⇐
Forecasting
Market
Planning
Planning
Aggregate
Aggregate
Resource
⇐
Forecasting
Production
Planning
Planning
Item
Master
Rough-cut
⇐
Forecasting
Production
Capacity
Scheduling
Planning
Spare
Material
Capacity
Forecasting
Requirement
⇐
Requirement
Planning
Planning
The master production schedule (MPS) is obtained by disaggregating the aggregate plan. At
this level we must specify, for each finished good, the lot size and the safety stock level. Some
techniques for lot sizing have already been proposed in the previous section. Here we will
address this problem more globally. The problem of choosing the safety stock was not yet
tackled. This is the purpose of this chapter.
MPS: lot size ?
How many to order ?
(FG)
safety stock ? When to order ?
(FG)
Inventory control techniques thus aim at solving the two questions : “When to order and how
much ?” for finished goods. However, not all company have an MRP system.
What if there is no MRP ?
In that case, the control of the stock of raw material and of component still need to be
controlled. The techniques described in this section can then be used for the “dependent”
demand too.
( raw materials / components / ) finished goods
Prod 2100-2110
Inventory Control
1
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