OM-Chapter 9 Flashcards
Aggregate Planning (17 cards)
Aggregate planning
Capacity planning for the coming medium-term period, for example ,3 to 18 months. Tactical decisions which define the parameters within which an organization will operate.
A good aggregate plan requires:
-Unit of measure
-Forecast
-Method
-Planning model
-Time horizon
-Levels of demand
-Changes
-Objectives
-Facilities seen as fixed
Aggregate planning in service orgs
-Determine staffing levels
-Workforce and customer scheduling
-Level skills
-Restriction on service time
Aggregate planning concepts
-Resources to manufacture linked to demand for the products
-Rate of output, demand forecast, capacity, inputs, people, stockholding
-Internal and external factors influence plans
-Breakdown aggregate plan for each product
Variables in aggregate planning strategies
Systems: variances in demand
-Make-to-stock
-Make-to-order
-Assemble to order
Expected and not known demand
Medium term planning
Variables: inventory, production or throughput rate, size of workforce ,and subcontracting of products
Options available in managing an aggregate plan
Capacity options
Demand options
Capacity options
-Overtime/idle time
-Contract/part-time workers
-Changing inventory levels
-Subcontracting/outsourcing
-Employing/dismissing workers
Demand options
-Mixing products/services
-Influence demand
-Backlogs/back ordering
-Different pricing strategies
-Creating new demand
Strategies for uneven demand
Most popular strategies:
-Maintaining a level workforce
-Producing at a steady output rate
-Matching demand for each period
-Combining all/some of these
-Chase strategy
-Level strategy
-Combining pure strategies
Costs prevalent in aggregate planning
-Employment and dismissal costs
-Back ordering and stock-out costs
-Subcontracting costs
-Overtime and idle time cost
-Inventory carrying cost
-Part-time labor cost
Aggregate planning methods
Trial-and-error method
Mathematical methods
Choosing a strategy
-Organizational policies
-Organizational costs
-Agreements with unions
Trial-and-error method
Assumptions
-All plans are feasible
-Inventory(uniform rates)
-Costs(linear function)
-Independent unit costs
-Costs reasonably estimated
-Constant throughput rate
Mathematical methods
-Linear programming
-The linear decision rule
-Simulation model
-Worked examples
Aggregate planning in a service environment
-Service demand management strategies
-Service supply management strategies
Service demand management strategies
-Segmentation of customers
-Difference in pricing
-Provide counter seasonal services
-Provide complementary services
-Utilize a reservation system
Service supply management strategies
-Schedule employees to meet demand
-Encourage customers to participate
-Contingent employees
-Capacity that can be adjusted
-Capacity that can be shared
