Master production scheduling and a comparison of material requirements planning and cover-time planning

For a company's long-term profitability, a most important process is the way it determines and promises delivery times and quantities of incoming customer orders. In practical computer applications Material Requirement Planning (MRP) and/or Reorder point systems are the base techniques mostly used. This article presents cover-time planning, a variant of a reorder point system. Cover-Time Planning (CTP) is developed with a forward-looking forecasted demand rate and the decision variable is "time", instead of "quantity" for an ordinary reorder-point system. The two methods are introduced and compared through a numerical example. MRP and CTP must treat practical "make-tp-order"; therefore, this paper discuss available-to-promise, planning bills, and other help systems for practical applications of Master Production Scheduling. The paper presents how and why, in practice, a Master Production Scheduling system with an available-to-promise function should be used and how this system should be designed. It is also here argued that a fully Enterprise Resource Planning (ERP) sustem cannot only be created by MRP, but also by CTP.