Flashcards
15. Operational Planning
Flashcards do conjunto (15)
- 1What is operations planning?Operations planning is a process that helps firms provide:
(a) Better customer service
(b) Lower inventory
(c) Shorten lead times
(d) Stabilize production rates, and employment - 2What does the operational planning process consist of?- The process consists of a series of meetings, finishing with a high-level meeting where key intermediate-term decisions are made. This must occur at both an aggregate (overall) level and also at the detailed (individual product) level.
- 3Types of operational planning• Long-range planning: Planning focusing on a horizon greater than one year. Generally done annually.
• Intermediate-range planning: Planning to focus on a period from 3 to 18 months. Time increments that are usually monthly, or sometimes weekly or quarterly.
• Short-range planning: Planning covering a period from one day to six months. Daily or weekly increments - 4An aggregate operations plan• Specify the optimal (satisfactory) combination of production rate (units completed per unit of time), workforce level (number of workers) and inventory on hand (inventory carried from previous period)
• Product group or broad category (aggregation)
• This planning is done over an intermediate-range planning period of 3 to 18 months, and used to identify overall resource levels required; staff, working capital and equipment - 5Production planning strategies1. Chase demand strategy: Match the production rate by hiring and laying off employees and / or sub-contracting. Must have a pool of easily trained applicants to draw upon
2. Stable workforce: Vary the number of hours worked through flexible work schedules or overtime
3. Level strategy: Demand changes are absorbed by fluctuating inventory levels, order backlogs and lost sales - 6Distinguish between pure and mixed strategy→ Pure strategy: when just one of these approaches is used to absorb demand fluctuations
→ Mixed strategy: When two or more approaches are used - 7Policy determinants: Chase demandHigh inventory holding costs
Low staff change costs
Often seen in service industries - 8Policy determinants: Stable productionLow inventory holding costs
High staff change costs
Often seen in stable manufacturing industries - 9Relevant costs1. Basic production costs: The fixed and variable costs incurred in producing a given product type in a given time period
2. Costs associated with changes in the production rate: Hiring, training and laying off personnel
3. Inventory holding costs
4. Backorder costs: Lost sales, stock-out handling - 10What is a level schedule?- A level schedule holds production constant over a period of time. It is something of a combination of the strategies we have mentioned here. For each period, it keeps the workforce constant and inventory low, and depends on demand to pull products through
- 11Advantages of level scheduling1. The entire system can be planned to minimize inventory and work-in process
2. Product modification are up-to-date because of the low amount of work-in process
3. There is a smooth flow throughout the production system
4. Purchased items from vendors can be delivered when needed, often directly to the production line - 12Requirements of level scheduling1. Production should be repetitive (assembly-line format)
2. The system must contain excess capacity
3. Output of the system can be fixed for a period
4. There must be a smooth relationship among purchasing, marketing and production
5. The cost of carrying inventory must be high
6. Equipment costs must be low
7. The workforce must be multi-skilled - 13What is yield management?- Yield management is the process of allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue or yield. It has existed as long as there has been limited capacity for serving customers. Its widespread application began with American Airlines’ computerized reservation system (SABRE).
- 14Yield management is most effective when...1. Demand can be segmented by customer
2. Fixed costs are high and variable costs are low
3. Inventory is perishable
4. Product can be sold in advance
5. Demand is highly variable - 15The importance of yield managementPricing structures must appear logical to the customer and justify the different prices. The variability in arrival or starting times, duration and time between customers + the service process must be handled. Additionally, employees must be trained to work in an environment where overbooking and price changes are standard occurrences that directly impact the customer. The essence of yield management is the ability to manage demand.
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- Business and Management 2A (Operations Management) FlashCards sobre 15. Operational Planning, criado por Nina Olsson em 02-08-2018.
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- Nina Olsson
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