Mind map
Aggregate Planning
Map content
Aggregate Planning
Characteristics
- Demand is assumed to be fluctuating, uncertain, or seasonal
- change in supply and demand variables
- Low inventories, good labour relations, low costs, flexibility to increase future output levels and good customer service
- Facilities that are considered fixed and cannot be expanded.
Demand can be modified
- pricing
- Advertising and promotion
- Backlog or reservation
- complementary product
variables to modify supply
- hiring and layoff of employees
- using overtime and undertime
- carrying inventory
- subcontracting
- cooperative arrangements
Basic strategies
- Maintain a level workforce
- Maintain a steady output rate
- match demand period by period
- combination of decision variables.
Aggregate-planning costs
- Hiring and layoff costs
- overtime and undertime costs
- Inventory carrying costs
- subcontracting costs
- subcontracting costs
- cost of stockout and back order
Techniques for aggregate planning
- Informal techniques
- Mathematical techniques
- Linear programming and extensions
- Linear decision rule
- Heuristic and simulation techniques
- Management coefficients approach
- Simulation search procedures
Improved hierarchical production planning
- Forecasting
- Aggregate production planning
- Disaggregate production planning
- Sequencing