6.1 Creating the Master Schedule

6.1 Creating the Master Schedule

Quick Answer: The master production schedule (MPS) is the authorized, time-phased plan of end-item (or planning-item) production. It is built from forecasts and customer orders but is a planner decision, not a passive copy of either. Available-to-promise (ATP) is the uncommitted portion of MPS supply used for order promising.

Domain IV of the CPIM ECM 9.0 asks you to plan and manage internal supply sources. After S&OP sets the aggregate rate of supply, the master schedule is the first detailed commitment: what will be finished, how many, and when. Everything downstream—MRP, purchasing, and shop-floor execution—explodes from this schedule. Weak MPS logic creates either stockouts or excess WIP; strong MPS logic turns the production plan into a feasible, promiseable plan.

Where the MPS Sits in the Planning Hierarchy

Recall the cascade you will see again in later Domain IV and Domain VII material:

1. Strategic / business plan → long-horizon volume and mix targets
2. S&OP / production plan → aggregate families by month or week
3. Master schedule (MPS) → specific items (or planning bills) by week or day
4. MRP → component and raw-material requirements
5. Detailed scheduling / PAC → operations on the floor

The MPS is therefore the disaggregation of the production plan. If the production plan says "build 4,000 finished goods of Family A in July," the MPS assigns those units to SKUs A1, A2, and A3 across the weeks of July, subject to capacity and materials.

MPS vs. Forecast vs. Customer Orders

Exam questions frequently try to equate three different numbers. Keep them separate:

In a make-to-stock environment, early periods often show forecast as the demand driver until orders arrive; as orders book, they consume the forecast so you do not double-count. In make-to-order or assemble-to-order, the MPS may be driven more by backlog and planning bills, with forecast still shaping the longer horizon.

Critical CPIM distinction: The forecast is a prediction. Customer orders are commitments. The MPS is a decision. Changing the forecast does not automatically change the MPS; the master scheduler updates the MPS deliberately.

Building the Time-Phased MPS Grid

A classic MPS worksheet has rows such as:

• Forecast
• Customer orders
• Projected available balance (PAB)
• Available-to-promise (ATP)
• Master production schedule (MPS)

Projected available balance in period t is typically:

PAB(t) = PAB(t−1) + MPS(t) - Demand(t)

where Demand is the greater of forecast and customer orders inside the demand time fence (or customer orders only, depending on policy), and often the greater of forecast and orders outside the fence—exact rule is policy-driven, but the exam expects you to apply the stated rule consistently.

Worked Example: Eight-Week MPS Setup

Starting on-hand inventory = 120 units. Lot size / MPS receipts are planned in multiples of 100. Safety stock target = 40 (the planner will not let PAB fall below 40 without action).

Demand used for PAB (policy: max(forecast, orders) each week):

PAB walk-forward:

• Week 1: 120 + 100 - 95 = 125
• Week 2: 125 + 0 - 80 = 45
• Week 3: 45 + 100 - 75 = 70
• Week 4: 70 + 0 - 75 = -5 ← problem: below safety stock and negative
• The planner must add or pull forward an MPS receipt (for example, move 100 into Week 4 or increase Week 3).

Revised Week 4 MPS = 100, then:

• Week 4: 70 + 100 - 75 = 95
• Week 5: 95 + 100 - 90 = 105
• Week 6: 105 + 100 - 90 = 115
• Week 7: 115 + 0 - 85 = 30 ← below safety stock of 40 → add MPS in Week 7
• With Week 7 MPS = 100: 115 + 100 - 85 = 130
• Week 8: 130 + 100 - 85 = 145

This is the craft of master scheduling: you do not "accept" a negative PAB; you adjust MPS quantities and timing until inventory and service policies hold.

Available-to-Promise (ATP)

ATP answers the sales question: "How many more firm orders can we accept against the current MPS without creating a shortfall?"

Discrete ATP (non-cumulative)

For the first period with an MPS receipt:

ATP(1) = On-hand + MPS(1) - Σ Customer orders until next MPS

For later MPS periods:

ATP(t) = MPS(t) - Σ Customer orders from t until next MPS

Using the revised schedule (MPS in weeks 1, 3, 4, 5, 6, 7, 8) and the customer-order row above:

• ATP Week 1 (covers weeks 1–2 until next MPS in 3): 120 + 100 - (95+70) = 55
• ATP Week 3 (covers week 3 only if next MPS is week 4): 100 - 40 = 60
• ATP Week 4: 100 - 20 = 80
• ATP Week 5: 100 - 10 = 90
• ATP Weeks 6–8: MPS minus remaining orders (mostly 0) → ATP equals MPS in those weeks under discrete logic when no orders remain

If a salesperson wants to book 50 more units for Week 2, discrete ATP in the Week 1 bucket is 55, so the promise is feasible without changing the MPS. Booking 70 would exceed ATP 55 and require either a schedule change or a later promise date.

Cumulative ATP with Look-Ahead

Cumulative methods allow unused ATP in earlier periods to cover later periods, and look-ahead variants prevent promising into a future negative ATP. On the exam, read the stem carefully: if it says discrete, do not "borrow" forward; if it says cumulative, sum remaining ATP correctly.

Planning Horizon and Time Fences (Creation Context)

When creating the MPS you must choose a planning horizon long enough to cover the cumulative lead time of the product (longest path of manufactured and purchased lead times). Too short a horizon means MRP will see demand too late to order long-lead components.

Time fences (covered in depth in 6.3) already shape creation:

• Inside the demand time fence (DTF), actual orders dominate; forecasts are typically ignored for demand calculation.
• Inside the planning time fence (PTF), changes to the MPS usually require senior approval; the system may freeze MPS receipts.
• Beyond the PTF (liquid zone), the planner (or planning logic) can insert MPS receipts more freely to chase forecast.

Practical Creation Checklist for CPIM

1. Confirm the item is a true MPS item (end item, product family planning bill, or critical intermediate).
2. Load forecast and current customer orders into the horizon.
3. Set lot-size / policy and safety-stock or days-of-supply rules.
4. Place trial MPS receipts; compute PAB; eliminate negatives and policy violations.
5. Compute ATP for order promising.
6. Hold the candidate MPS for rough-cut capacity planning (RCCP) before firming and releasing to MRP (next section).

Master scheduling is judgment under constraints: you are authorizing supply, enabling promises, and protecting the factory from chaos—all before detailed material explosion begins.