Aggregate Planning.ppt - 1 Aggregate Sales and Operations...

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Aggregate Sales and Operations Planning

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Master scheduling
Material requirements planning
Order scheduling
Weekly workforce and
customer scheduling
Daily workforce and customer scheduling
Process planning
Strategic capacity planning
Sales and operations (aggregate) planning
Long
range
Intermediate
range
Short
range
Manufacturing
Services
Sales plan Aggregate operations plan
Forecasting
& demand
management

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Sales and Operations Planning
Activities

Long-range planning
–
Greater than one year planning horizon
–
Usually performed in annual increments

Medium-range planning
–
Six to eighteen months
–
Usually with weekly, monthly or quarterly
increments

Short-range planning
–
One day to less than six months
–
Usually with weekly or daily increments

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The Aggregate Operations Plan

Main purpose: Specify the optimal
combination of
–
production rate (units completed per unit
of time)
–
workforce level (number of workers)
–
inventory on hand (inventory carried from
previous period)

Product group or broad category
(Aggregation)

This planning is done over an intermediate-
range planning period of 3 to18 months

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Balancing Aggregate Demand
and Aggregate Production Capacity
0
2000
4000
6000
8000
10000
Jan Feb Mar Apr May Jun
4500
5500
7000
10000
8000
6000
0
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
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
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
What we want to do is
balance out the
production rate,
workforce levels, and
inventory to make
these figures match up

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