Miranda Llampallas

Aggregate planning today

1. Aggregate planning

   • A firm plan its manufacturing activities
     • Vatiety of levels
     • Operate it as a system
   • Covers a time between 3 to 18 months
   • Goal
     • Achieve a production plan
       • Effectively utlize resources to satisfy expected demand
   • Good resource input mix
   • Influence
     • Demand
       • Marketing and operations
     • Supply
       • Price, advertising and product mix
   • Lack of acceptance
     • Complex models

2. Aggregate planning in perspective

   • Characteristics
     • Time horizon=12 months
     • Level product demand=one or a few categories
       • Demand=fluctuating,seasonal or uncertain
     • Change supply/demand
     • Low inventories, good labour relations, low cost, flexibility & good customer service
     • Fixed cannot be expanded
   • Facilities
     • Planning
       • Physical capacity
       • Deals with acquisition of resources
     • Scheduling
       • Short range
         • Deals with allocating available resources
   • Decision options
     • Those modifying
       • Demand
       • Supply
   • Basic strategies
     • Maintain
       • Level of workforce
       • Steady output rate
     • Match demand
     • Combination of decision variables
     • 2 factors
       • Policy
       • Cost

3. Models

   • Try to minimize: Total relevant cost
   • Minimize the deviations from prioritized goals

4. Techniques

   • Informal
   • Mathematical
   • Linear programming & extentions
   • Linear decision rule
   • Heurestic and simulation
   • Management coefficients approach
   • Simulation search procedures

5. New developments

   • Simulation model
     • Communications can be established among production
     • Levels for inventory, service and production can be set.
   • Heurestic method
     • RPCC
       • Represents the relative value of the cost of changing the production level to the one of carrying inventory
     • Indicators
       • Current period ratio
       • Planning horizon ratio
   • Production switching rule
     • Accomodate discrete production environments which rely on crew loading
     • Allows incorporation of overtime options & is interactive in options
   • Hierarchical production planning
     • Reduce complexity
     • 4 modules
       • Forecasting
         • APP
           • Disaggregate PP
             • Sequencing