Question 116 - CPIM-Part-2 discussion

The master production schedule (MPS) and final assembly schedule (FAS) are most closely linked in the assemble-to-order (ATO) production strategy. ATO is a production strategy that produces customized products or services by assembling standardized components or modules according to customer specifications. The MPS is a plan that specifies the quantity and timing of finished products to be produced in a given period. The FAS is a plan that specifies the quantity and timing of final assembly operations to be performed in a given period. In the ATO strategy, the MPS and FAS are closely linked because the MPS determines the demand for the finished products, and the FAS determines the demand for the components or modules. The MPS and FAS are synchronized to ensure that the components or modules are available when needed for the final assembly, and that the finished products are delivered on time to the customers.

The MPS and FAS are not closely linked in the other production strategies. Make-to-stock (MTS) is a production strategy that produces standardized products or services in advance of customer demand, and stores them in inventory until they are sold. The MPS is based on the forecasted demand, and the FAS is not relevant for this strategy, as there is no customization involved. Make-to-order (MTO) is a production strategy that produces customized products or services from raw materials or components after receiving customer orders. The MPS is based on the actual customer orders, and the FAS is not relevant for this strategy, as there is no assembly involved. Engineer-to-order (ETO) is a production strategy that produces customized products or services that require engineering design or modification after receiving customer orders. The MPS is based on the actual customer orders, and the FAS is not relevant for this strategy, as there is no standardization involved.Reference: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1: Supply Planning Concepts, p. 23; Master Production Schedule; Final Assembly Schedule; Assemble to order.