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12/07/2010

Make and don't buy

I've been asked this question several times: what can we push to finished product warehouse using only materials and components that we already have in house? This question may arise for different reasons: late supplies, problems with paying suppliers, will to consume certain types of materials. In any case it's not trivial to solve this problem in an optimal way and it's not feasible to solve it in a satisfying way with usual production planning software. An approach that is easy to follow with Cowry for a sub-optimal but good solution is this: create forecast records for one piece for every finished product beside current customer orders, run MRP, fully peg the forecast records and mark the ones not linked (directly or indirectly) to purchase orders, increase these forecast records by a predefined amount and run again mrp and pegging until there is no increasable forecast record. At the end of the process you'll get the list of forecast records deliverable with in house material. Of course this approach could be refined considering capacity constraints using the finite capacity features of Cowry or your APS'.