5-Agg Planning Inventory - Syllabi 1 2 3 4 5 6 Introduction Operations Strategy Competitiveness Innovation Transformation Process Aggregate Planning

5-Agg Planning Inventory - Syllabi 1 2 3 4 5 6 Introduction...

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Syllabi Introduction Operations Strategy & Competitiveness Innovation 1 2 3 Transformation Process Aggregate Planning & Inventory Lean Manufacturing 4 5 6 2
Syllabi Network Models & Project Management Supply Chain Management : Fundamental Supply Chain Management : Strategy 8 9 7 Research Method in OM Learning from the field - Big Paper Learning from the field - Big Paper 10 3 11 12
A g g r e g a t e P l a n n i n g 4
Process Planning Strategic Capacity Planning Aggregate Planning Long- range Intermediate- range Manufacturing Aggregate Planning - A prerequisite process Master Production Scheduling Material Requirements Planning Order Scheduling Weekly Workforce & Customer Scheduling Daily Workforce & Customer Scheduling Short- range Services
Goal: Specify the optimal combination of production rate (units completed per unit of time) workforce level (number of workers) Aggregate Planning - Objectives inventory on hand (inventory carried from previous period) Product group or broad category (Aggregation) Intermediate-range planning period: 6-18 months
0 2000 4000 6000 8000 10000 Jan Feb Mar Apr May Jun 4500 5500 7000 10000 8000 6000 Demand forecast in units Balance out the Aggregate Planning Balancing demand and production rate 0 2000 4000 6000 8000 10000 Jan Feb Mar Apr May Jun 4500 4000 9000 8000 4000 6000 Aggregate capacity of the company to meet demand production rate, workforce levels, and inventory
Aggregate Planning Unit Demand and Cost Data Materials $5/unit Holding costs $1/unit per mo. Demand/mo Jan Feb Mar Apr May Jun 4500 5500 7000 10000 8000 6000 Marginal cost of stock-out $1.25/unit per mo. Hiring and training cost $200/worker Layoff costs $250/worker Labor hours required . 0.15 hrs/unit Straight time labor cost $8/hour Beginning inventory 250 units Productive hours/worker/day 7.25 Paid straight hrs/day 8
Cut-and-TryStraight Labor Costs and OutputWhat are the aggregate hours/worker/month, units/worker, and dollars/worker? Demand/mo Jan Feb Mar Apr May Jun 4500 5500 7000 10000 8000 6000 7.25x22 Jan Feb Mar Apr May Jun Days/mo 22 19 21 21 22 20 Hrs/worker/mo 159,5 137,75 152,25 152,25 159,5 145 Units/worker 1063,33 918,33 1015 1015 1063,33 966,67 $/worker $1.408 1.216 1.344 1.344 1.408 1.280 Productive hours/worker/day 7.25 Paid straight hrs/day 8 159.5 : 0.15 22x8hrsx$8=$1408
Chase Strategy Hiring & Firing to meet demand Jan Days/mo 22 Hrs/worker/mo 159,5 Units/worker 1.063,33 $/worker $1.408 Assumption: current workforce is 7 workers. Net requirements for production, or 4500-250=4250 units Number of workers needed to produce the net Jan Demand 4.500 Beg. inv. 250 Net req. 4.250 Req. workers 3,997 Hired Fired 3 Workforce 4 Ending inventory 0 requirements, or 4250/1063.33=3.997 or 4 workers Number of workers to hire/fire. Only need 4 workers, we have 7, so 3 can be fired.
Jan Feb Mar Apr May Jun Days/mo 22 19 21 21 22 20 Hrs/worker/mo 159,5 137,75 152,25 152,25 159,5 145 Units/worker 1.063 918 1.015 1.015 1.063 967 $/worker $1.408 1.216 1.344 1.344 1.408 1.280 Complete calculations for the six month planning horizon. Chase Strategy Hiring & Firing to meet demand Jan Feb Mar Apr May Jun Demand 4.500 5.500 7.000 10.000 8.000 6.000 Beg. inv. 250 Net req. 4.250 5.500 7.000 10.000 8.000 6.000 Req. workers 3,997 5,989 6,897 9,852 7,524 6,207 Hired 2 1 3 Fired 3 2 1 Workforce 4 6 7 10 8 7 Ending inventory 0 0 0 0 0 0
Jan Feb Mar Apr May Jun Demand 4.500 5.500 7.000 10.000 8.000 6.000 Beg. inv. 250 Net req. 4.250 5.500 7.000 10.000 8.000 6.000 Req. workers 3,997 5,989 6,897 9,852 7,524 6,207 Hired 2 1 3 Fired 3 2 1 Workforce 4 6 7 10 8 7 Chase Strategy Hiring & Firing to meet demand

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