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Resources are shortages may gradual or none no abrupt

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Unformatted text preview: no abrupt result in lost sales. production changes Advantages Applies mainly to production, not service, operations Varying workforce size by hiring or layoffs Avoids the costs Hiring, layoff, and training of other costs may be alternatives significant Used where size of labor pool is large Table 13.1 Aggregate Planning Options Option Advantages Matches Varying seasonal production fluctuations rates without hiring/ through overtime or training costs idle time SubSubcontracting Permits flexibility and smoothing of the firm’s firm’ output Disadvantages Some Comments Overtime premiums; tired workers; may not meet demand Allows flexibility within the aggregate plan Applies mainly in Loss of quality production control; reduced profits; settings loss of future business Table 13.1 Aggregate Planning Options Aggregate Option Advantages Aggregate Planning Options Disadvantages Some Comments Option High turnover/ training costs; quality suffers; scheduling difficult Good for unskilled jobs in areas with large temporary labor pools Back ordering during highhighdemand periods Using partparttime workers Is less costly and more flexible than full-time fullworkers Influencing demand Uncertainty in Tries to use demand. Hard excess to match capacity. Discounts draw demand to new customers. supply exactly. Creates marketing ideas. Overbooking used in some businesses. Advantages Disadvantages Some Comments May avoid overtime. Keeps capacity constant. Customer must be willing to wait, but goodwill is lost. Allows flexibility within the aggregate plan May require skills or equipment outside the firm’s areas of firm’ expertise Risky finding products or services with opposite demand patterns CounterFully utilizes Counterseasonal resources; allows stable product and service workforce mixing Table 13.1 Methods for Aggregate Planning A mixed strategy may be the best mixed way to achieve minimum costs There are many possible mixed There strategies Finding the optimal plan is not Finding always possible Mixing Options to Develop a Plan Level strategy Level Daily production is uniform Daily Use inventory or idle time as buffer Use Stable production leads to better Stable quality and productivity Some combination of capacity Some options, a mixed strategy, might be the best solution Table 13.1 Mixing Options to Develop a Plan Chase strategy Chase Match output rates to...
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