Page 451 - Orlicky's Material Requirements Planning

CHAPTER 25 Dynamic Buffers 429

FIGURE 25-8
Plant Capacity Requirements
Capacity
requirements to
meet buffer
strategy.
Plant Capacity
(60,000 Gallons
per Day)

FIGURE 25-9
Number of Setups per Period
Plant setups to
meet buffer
strategy.

Average Number of
Setups per Period

then transforming into quick-response mode in order to react to how the market affects
those buffer positions. Setups might go up, but shortages will go down.
Clearly, this is not an efficient mode of operation, as viewed from the traditional
cost-efficiency model. The asset base is being used at different levels over the course of
the year to reduce shortages, maximize sales potential, minimize old or unnecessary
inventory, and limit expedite-related expenses. There is nothing inefficient about the
combination of these effects.

Ramp-Up and Ramp-Down
Planned adjustments also can be used for part/SKU introduction, deletion, and transi-
tion. The example of part/SKU introduction is examined first. In the part/SKU ramp-up
example (Figure 25-10), there is a part that is being ramped up based on a sales and mar-
keting plan. The figure covers a 12-month period. The sales and marketing plan calls for
the SKU to reach market maturation within a 9-month period in its initial distribution
region with an average daily usage of over 40. Instead of immediately spending the cash
and capacity to bring the buffer to full size, a planned adjustment will be applied. This
planned adjustment will ramp up the planned ADU over a period of time, thus creating