3325p11h13aggregate planning

Aggregate plan costs subcontracting permits

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Unformatted text preview: time or idle time Matches seasonal Overtime premiums; Allows flexibility fluctuations without tired workers; may not within the hiring/ training meet demand. aggregate plan. costs. Subcontracting Permits flexibility and smoothing of the firm’s output. Loss of quality control; reduced profits; loss of future business. Applies mainly in production settings. 13 – 26 Aggregate Planning Options Aggregate Planning Options OPTION ADVANTAGES DISADVANTAGES COMMENTS Using partIs less costly and time workers more flexible than full-time workers. High turnover/ training Good for unskilled costs; quality suffers; jobs in areas with scheduling difficult. large temporary labor pools. Influencing demand Uncertainty in demand. Hard to match demand to supply exactly. Tries to use excess capacity. Discounts draw new customers. Creates marketing ideas. Overbooking used in some businesses. 13 – 27 Aggregate Planning Options Aggregate Planning Options OPTION ADVANTAGES DISADVANTAGES COMMENTS Back ordering during highdemand periods May avoid overtime. Keeps capacity constant. Customer must be willing to wait, but goodwill is lost. Many companies back order. Counterseasonal product and service mixing Fully utilizes resources; allows stable workforce. May require skills or equipment outside the firm’s areas of expertise. Risky finding products or services with opposite demand patterns. 13 – 28 Mixing Options to Develop a Plan ▶ A mixed strategy may be the best way to mixed achieve minimum costs achieve ▶ There are many possible mixed strategies ▶ Finding the optimal plan is not always Finding possible possible 13 – 29 Mixing Options to Develop a Plan ▶ Chase strategy ▶ Match output rates to demand forecast for each Match period period ▶ Vary workforce levels or vary production rate ▶ Favored by many service organizations 13 – 30 Mixing Options to Develop a Plan ▶ Level strategy ▶ Daily production is uniform ▶ Use inventory or idle time as buffer ▶ Stable production leads to better quality and Stable productivity productivity ▶ Some combination of capacity options, a Some mixed strategy, might be the best solution mixed 13 – 31 Methods for Aggregate Methods Planning Planning ▶ Graphical Methods ▶ Popular techniques ▶...
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