Mgmt 361 Ch 4- - MGMT 361 Operations Management(OM Ch IV Aggregate Planning Based on Ch 13 from Stevenson 1 Aggregate Planning Steps Review 1

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1 MGMT 361 Operations Management (OM) Ch IV: Aggregate Planning Based on: Ch. 13 from Stevenson
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Aggregate Planning Steps - Review 2 1. Calculate aggregate demand for each period. 2. Select a strategy and obtain the basic plan. 3. Make adjustments to satisfy policies ( constraints ) to get the final plan. 4. Break down the final plan and calculate costs. 5. Make further adjustments to improve costs (linear programming
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If there are hard and soft constraints: First take care of hard constraints Second take care of soft constraints without violating hard constraints. If there are conflicts between hard and soft constraints, you must choose the plan which satisfies hard constraints! Hard constraint MUST be satisfied Soft constraint AVOID if you can and as much as you can 3 Two Basic Types of Constraints
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4 Spread production over as many months as possible. Produce as close as possible to the month in which product is needed Keep inventory = 0 whenever possible Adjustments (for capacity or other constraints) Production each month = Average Demand = [Demand P1 + Demand P2 + …+ Demand PT Beginning Inventory ] / T For P1: Production P1 = Demand P1 – Beg. Inv. For other periods: Prod. *Pi = Demand *Pi Basic Plan Level Strategy Chase Strategy P1 = Period 1 T= time Pi = i th Period / Month
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Period 1 2 3 4 5 Capacity 5000 5000 5000 5000 5000 Demand 4250 4000 4700 5600 4600 5 Example 5 4250 4000 4700 5600 4600 Basic Plan Inventory 0 0 0 0 0 Basic plan: Capacity exceeded in P4. Move 300 to P3, 300 to P2. Constraints: Cannot exceed capacity. Inventory cannot exceed 500. Soft constraint: Avoid shortages but if you cannot avoid, keep backordering as small as possible. We will first take care of capacity (with no shortages). Then we will take care of inventory (with back ordering). Adjust. 1
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This note was uploaded on 03/03/2012 for the course MGMT 361 taught by Professor Panwalker during the Spring '10 term at Purdue University-West Lafayette.

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Mgmt 361 Ch 4- - MGMT 361 Operations Management(OM Ch IV Aggregate Planning Based on Ch 13 from Stevenson 1 Aggregate Planning Steps Review 1

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