Aggregate Planning

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

Resource summary

	Created by Andrea E Coli over 8 years ago