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Aggregate Planning

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Aggregate Planning Overview Aggregate planning in the planning process Aggregate planning strategies Capacity options Chase strategy Level strategy Demand options ... – PowerPoint PPT presentation

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Title: Aggregate Planning


1
Aggregate Planning
2
Overview
  • Aggregate planning in the planning process
  • Aggregate planning strategies
  • Capacity options
  • Chase strategy
  • Level strategy
  • Demand options
  • Mixing options
  • Graphical/charting methods
  • Linear programming
  • Simulation

3
Planning Relationships
4
Planning Relationships
5
Planning Relationships
Aggregate plan production and staffing plan
6
Planning Relationships
Aggregate plan production and staffing plan
7
Planning Relationships
Aggregate plan production and staffing plan
8
Planning Relationships
Aggregate plan production and staffing plan
9
Planning Horizons
Responsible Operations managers
Intermediate-range plans Sales planning Production
planning and budgeting Setting employment,
inventory, subcontracting levels Analyzing
operating plans
1 year
5 years
Today
3 Months
Planning Horizon
10
Planning Horizons
Responsible Top executives
Long-range plans RD New product plans Capital
expenses Facility location, expansion
1 year
5 years
Today
3 Months
Planning Horizon
11
Planning Horizons
Short-range plans Job assignments Ordering Job
scheduling Dispatching
Responsible Operations managers, supervisors,
foremen
1 year
5 years
Today
3 Months
Planning Horizon
12
Planning Horizons
13
Planning hierarchy
14
Planning hierarchy
Planning horizon Long range Years Itermediate
range 6 18 months Short range Weeks
15
Planning hierarchy
Planning horizon Long range Years Itermediate
range 6 18 months Short range Weeks
Scope Entire production line i.e. Ford
trucks Product Family i.e. Ford F
series Specific model i.e. Ford F-150
16
What is an aggregate plan?
17
What is an aggregate plan?
18
What is an aggregate plan?
19
Managerial Inputs
20
Managerial Inputs
21
Managerial Inputs
22
Managerial Inputs
23
Managerial Inputs
24
Managerial Inputs
25
Managerial Inputs
26
Managerial Inputs
27
Aggregate Planning Objectives
  • Minimize Costs/Maximize Profits
  • Maximize Customer Service
  • Minimize Inventory Investment
  • Minimize Changes in Production Rates
  • Minimize Changes in Workforce Levels
  • Maximize Utilization of Plant and Equipment

28
Aggregate Planning Strategies Pure Strategies
  • Capacity Options change capacity
  • changing inventory levels
  • varying work force size by hiring or layoffs
  • varying production capacity through overtime or
    idle time
  • subcontracting
  • using part-time workers

29
Aggregate Planning Strategies Pure Strategies
  • Demand Options change demand
  • influencing demand
  • backordering during high demand periods
  • counterseasonal product mixing

30
Advantage/Disadvantages of Aggregate Planning
Options
  • See Table 13.1

31
Mixing the options The Extremes
Chase Strategy
Level Strategy
Production equals demand
Production rate is constant
32
Aggregate Planning Strategies
  • Level planning strategy
  • Produce same amount every month
  • Keep work force level constant
  • Find alternative work for employees when there is
    less demand
  • Vary non-work force capacity or demand options
  • Inventory levels allowed to fluctuate
  • Often results in lowest production costs
  • Toyota, Nissan employ this strategy

33
Aggregate Planning Strategies
  • Chase planning strategy
  • Output rates match demand
  • Vary work force level
  • Hiring/laying off
  • Vary non-work force capacity or demand options
  • Overtime and outsource
  • Part time employees
  • Service industries often utilize this strategy
  • Hospitality, construction, education
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