Let's see the below scenario:
Nicole is a Buyer. She creates a Scheduling Agreement
"My employer won a bid for a road construction that will last five months. We are going to need a variety of raw materials for the construction project. Cement is one of the main materials we will need. We are going to need 100 cubic feet of cement every week for the duration of the project.
I will create a Scheduling Agreement with a Planning Horizon of five months and set up releases for each week. This will be a total of 21 releases from April through August.
I will specify the Firm Zone for a two-week duration (14 days), the Trade-Off Zone for a four-week duration (28 days), and the Forecast/Planning Zone will be the remainder of the time. This will ensure that I receive my shipments of cement on time and that my Supplier has ample time to prepare the shipments for prompt delivery."
Jeremy is a Supplier. He receives the Scheduling Agreement
"I received a Scheduling Agreement for 2,100 cubic feet of cement, delivered weekly in increments of 100 cubic feet per week. Receiving a Scheduling Agreement with Releases helps me plan for each shipment and be prepared to deliver the cement on time according to the Scheduling Agreement."
Planning Horizon
The Scheduling Agreement for cement is shown below. The objective is to procure 2,100 cubic feet of cement over a five-month period. A release is set up for 100 cubit feet of cement each week. As each week passes, the Firm Zone and Trade-Off Zone's start and end dates are updated. When a release falls in the Firm Zone the release is generated and sent to the Supplier.
For an overview of Scheduling Agreement for cement, watch this video.
For understanding the processes that occur in this scenario, watch this video.
Note
All steps for a release do not have to be complete before the steps begin for the next release. For example, Release 1 may have been sent and the corresponding Order Confirmation, Advance Ship Notice, and Goods Receipt may have been delivered. However, it is not necessary for the Release 1 Invoice to be sent before Release 2 is delivered. Each release is organized and managed independently of other releases.