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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