Page 449 - Orlicky's Material Requirements Planning

CHAPTER 25 Dynamic Buffers 427

ASRLT, however, the actual available stock position is at the top of green if not slightly
over top of green.
Complicating the seasonality and ASRLT picture could be available capacity over the
course of a time period. Ice cream sales in the North America are an example. Obviously,
the summer is the peak time. Ice cream manufacturing capacity does not have a counter-
cyclic product to balance when there is less demand for ice cream. This means that com-
panies are reluctant to carry excess capacity above and beyond what the high-season
requirements are. Figure 25-5 is a seasonal example where all end items are buffered, and
the aggregate buffered inventory positions exceed plant capacity during the peak period.
In this example, the plant’s capacity is 60,000 gallons a day, on average. During the peak
season, buffer requirements exceed the total plant’s average daily requirements.
This often leads companies to believe that they must level-load the facilities over the
course of the year. In doing this, companies are trying to spread capacity requirements
out over the entire year to meet seasonal demand peaks. By level-loading, they are set-
ting an artificial batch determined by a perceived capacity limitation within a certain
interval. The obvious problem with this is that it requires companies to commit to larger
batches of specific inventory well in advance of demand. Inevitably, during peak seasons,
there are shortages of high-moving items and massive surpluses of other slow-moving
items. Figure 25-6 is an example of a level-loaded plant.

FIGURE 25-5
Seasonality with 100000
capacity 90000
limitations. 80000
Zone Levels 60000 Plant Capacity
70000
(60,000 Gallons
50000
per Day)
40000
30000
20000
10000

FIGURE 25-6
Level-loaded Level Loaded
capacity plan.
Plant Capacity
(60,000 Gallons
per Day)