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Unformatted text preview: MAN 3504 - Aggregate Production Planning 1 Aggregate Production Planning MAN 3504: Aggregate Production Planning MAN 3504: Aggregate Production Planning Aggregate Planning Overview ¡ Intermediate range (2-18 months) capacity planning ¡ Sets overall production (or capacity) levels for a MAN 3504: Aggregate Production Planning 2 Sets overall production (or capacity) levels for a product family, or a given portion (location) of the organization ¡ Main objective: Match production (capacity) to demand ¡ Demand fluctuations and changing cost structures are confounding factors Aggregate Planning Overview ¡ Assumes long term (strategic) matters are fixed: product offerings, facility size/location, equipment available, facility layout, etc. MAN 3504: Aggregate Production Planning 3 ¡ Must plan long enough into future to do execute the plan, such as hire workers, obtain raw materials, obtain financing, etc. ¡ It is an aggregate plan, not a plan for each individual product Aggregate Planning Overview ¡ Planning periods are often months or quarters ¡ Two main goals, in the following order: • Get a “feasible” plan (one that meets demand MAN 3504: Aggregate Production Planning 4 • Get a feasible plan (one that meets demand) • Get a minimum cost plan ¡ This first (and least detailed) stage of production & capacity planning; focus is on overall demand and overall capacity Aggregate Planning Overview ¡ Aggregate plan will eventually be broken into plans for individual finished units (Master Production Scheduling) MAN 3504: Aggregate Production Planning 5 ¡ Plans for individual finished units will eventually be used to get plans for the components that go into the finished products (Material Requirements Planning) Aggregate Planning “Units?” ¡ Plan will be based on a common or average “unit” • an “appliance” for an appliance manufacturer MAN 3504: Aggregate Production Planning 6 • a “sandwich” for a fast-food chain • a “can” or “bottle” for a bottler • a “course” for a university ¡ Will often use a “labor hour” as a common unit of measurement, particularly when the product group is quite diversified MAN 3504 - Aggregate Production Planning 2 Changeable Operational Factors in Intermediate Term ¡ Workforce (Permanent Employee) Levels ¡ Inventory Levels (Finished Goods) ¡ Overtime Levels MAN 3504: Aggregate Production Planning 7 ¡ Part-Time / Temporary Workers ¡ Subcontracting Levels ¡ Backordering Levels Note: Could also do some things to change demand , as opposed to changing production capacity , like changing prices, doing sales promotions, or generating new demand (by...
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- Spring '11
- aggregate production planning