Ch 13 - Part 1

Ch 13 - Part 1 - Chapter 13 Aggregate Planning Xun Li...

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Unformatted text preview: Chapter 13 Aggregate Planning Xun Li Learning Objectives 1) Business, sales & operations planning 2) What is aggregate planning?** 3) Aggregate planning strategies** 4) Develop aggregate plans & calculate costs Level plan*** Chase plan*** Hybrid plan 1) Evaluate the impact of aggregate plans on functional areas LO1: Business, sales & operations planning LO2: What is Aggregate Planning? Medium-term functional plans designed to operationalize the long-term strategic plan Based on composite (representative) products: Simplifies calculations Forecasts for grouped items are more accurate Balancing Aggregate Demand and Aggregate Production Capacity Details the aggregate production rate and the size of the workforce 4 LO2: What is Aggregate Planning? 5 2000 4000 6000 8000 10000 Jan Feb Mar Apr May Jun 4500 5500 7000 10000 8000 6000 2000 4000 6000 8000 10000 Jan Feb Mar Apr May Jun 4500 4000 9000 8000 4000 6000 Suppose the figure to the right represents forecast demand in units. Now suppose this lower figure represents the aggregate capacity of the company to meet demand. What we want to do is balance out the production rate, workforce levels, and inventory to make these figures match up. LO3: Aggregate Plan Strategies Level plans: Maintains a constant workforce and produces the same amount of product in each time period. Options to absorb demand peaks & valleys Finished goods inventories : Anticipate demand Back orders & lost sales : Delay delivery or allow demand to go unfilled Shift demand to off-peak times : Proactive marketing 6 LO3: Aggregate Plan Strategies Chase plans: Produces exactly what is needed to satisfy demand during each period. Options to adjust capacity Overtime & Undertime: Short-term option Subcontracting: Medium-term option Hire & fire workers: Long-term option Change the size of the workforce 7 LO3: Aggregate Plan Strategies Hybrid Plan Use a combination of options: Build-up inventory ahead of rising demand & use backorders to level extreme peaks Layoff or furlough workers during lulls Subcontract production or hire temporary workers to cover short-term peaks Reassign workers to preventive maintenance during lulls 8 LO4:Developing Aggregate Plan...
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This note was uploaded on 10/17/2011 for the course MNGT 368 taught by Professor Curthurds during the Spring '08 term at Nicholls State.

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Ch 13 - Part 1 - Chapter 13 Aggregate Planning Xun Li...

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