16 Aggregate Planning

16 Aggregate Planning - Lesson 16 Aggregate Planning refers...

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16 - 1 refers to intermediate range planning covering 2 to 24 months … a “big picture” look at planning aimed at balancing capacity and demand Lesson 16 Aggregate Planning
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16 - 2 Forecast, Production Plan and Inventory Recall from the forecasting presentation, future demand is forecasted, 6 Month Forecast 1 2 3 4 5 6 Forecast Demand 10 8 12 14 10 8 Production Plan 10 10 10 12 12 10 then a manufacturing production plan is developed, Inventory 10 10 12 10 8 10 12 resulting in an inventory plan which can be evaluated against financial objectives.
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16 - 3 Aggregate Planning Horizon Group level forecast Decision Areas Staff Planning Production planning Master production scheduling Purchasing (material and equipment) Distribution Short Range Intermediate Range Long Range Now 2 months - 2 years Aggregate planning
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16 - 4 Planning Sequence Master schedule Establishes short range schedules for specific products Aggregate Plan Establishes intermediate range production capacity for product groups Corporate strategies and policies Economic, competitive, and political conditions Aggregate demand forecasts Business Plan Establishes long range production and capacity strategies
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16 - 5 Aggregate Planning is a planning process which establishes a company-wide game plan for allocating resources (people, equipment, etc.) and economically meeting demand. It . Matches market demand to company resources . Expresses intermediate range demand, resources, and capacity in general terms – product groups or families of products rather than at the detail product level (e.g. televisions vs 21”, 27”, 32”, etc.) . Allows planners more time to deal with short range and day-to- day issues . Provides information to allow for flexibility … because of forecast inaccuracy intermediate plans do not have to be “locked in” too soon Aggregate Planning
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16 - 6 Aggregate Planning Objectives The overriding objective of Aggregate Planning is to consider company policies and management inputs related to operations, distribution & marketing, materials, accounting & finance, engineering and human resources to . . Maximize customer service . Minimize inventory investment . Minimize changes in production rates . Minimize changes in work-force levels . Maximize utilization of plant and equipment
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16 - 7 Supplier capabilities Storage capacity Materials availability Materials Current machine capacities Plans for future capacities Work-force capacities Current staffing level Operations New products Product design changes Machine standards Engineering Labor-market conditions Training capacity Human Resources Cost data Financial condition of firm Aggregate plan Customer needs Demand forecasts Competition behavior Managerial Inputs To Aggregate Planning
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16 - 8 The process of Aggregate Planning: . Use the company forecast to determine demand for each period . Determine capacities (regular time, overtime, subcontracting,
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16 Aggregate Planning - Lesson 16 Aggregate Planning refers...

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