Presentation is loading. Please wait.

Presentation is loading. Please wait.

POM - J. Galván 1 PRODUCTION AND OPERATIONS MANAGEMENT Ch. 14: Aggregate Scheduling.

Similar presentations


Presentation on theme: "POM - J. Galván 1 PRODUCTION AND OPERATIONS MANAGEMENT Ch. 14: Aggregate Scheduling."— Presentation transcript:

1 POM - J. Galván 1 PRODUCTION AND OPERATIONS MANAGEMENT Ch. 14: Aggregate Scheduling

2 POM - J. Galván 2 Learning Objectives Describe planning Describe planning Distinguish the types of plans Distinguish the types of plans Define aggregate scheduling Define aggregate scheduling Relate aggregate scheduling to the overall planning process Relate aggregate scheduling to the overall planning process Explain aggregate scheduling options Explain aggregate scheduling options Develop aggregate schedules Develop aggregate schedules

3 POM - J. Galván 3 Aggregate Planning Requires Logical overall unit for measuring sales and outputs Logical overall unit for measuring sales and outputs Forecast for intermediate planning period in these aggregate units Forecast for intermediate planning period in these aggregate units Method for determining costs Method for determining costs Model that combines forecasts and costs so that scheduling decisions can be made Model that combines forecasts and costs so that scheduling decisions can be made

4 POM - J. Galván 4 Setting goals & objectives Setting goals & objectives Example: Meet demand within the limits of available resources at the least cost Example: Meet demand within the limits of available resources at the least cost Determining steps to achieve goals Determining steps to achieve goals Example: Hire more workers Example: Hire more workers Setting start & completion dates Setting start & completion dates Example: Begin hiring in Jan.; finish, Mar. Example: Begin hiring in Jan.; finish, Mar. Assigning responsibility Assigning responsibility Planning

5 POM - J. Galván 5 Planning Horizons Today3 Months 1 year5 years Planning Horizon Short-range plans Job assignments Ordering Job scheduling Dispatching Intermediate-range plans Sales planning Production planning and budgeting Setting employment, inventory, subcontracting levels Analyzing operating plans Long-range plans R&D New product plans Capital expenses Facility location, expansion Responsible: Operations managers, supervisors, foremen Responsible: Operations managers Responsible: Top executives

6 POM - J. Galván 6 Management Level Today3 months1 year5 years Long-Range Facility location Intermediate-Range Aggregate plans Short-Range Dispatching High Low Top Executives Supervisors Operations Managers 18 months Types of Plans

7 POM - J. Galván 7 Relationships of the Aggregate Plan Aggregate Plan for Production Priority Planning & Scheduling Demand Forecasts, orders Master Production Schedule Detailed Work Schedules Plant Capacity External Capacity Inventory On Hand Raw Materials Available Work Force Marketplace and Demand Research and Technology Product Decisions Process Planning & Decisions

8 POM - J. Galván 8  A mathematically based aggregate planning model requires considerable: time time problem definition problem definition model development model development model verification model verification model application model application expertise expertise people who understand the problem people who understand the problem people who understand both the modeling process, and the specific model people who understand both the modeling process, and the specific model money money money to pay for all of the above money to pay for all of the above often requires funding for several people for several months! often requires funding for several people for several months! What’s Needed for Aggregate Planning

9 POM - J. Galván 9 Provides the quantity and timing of production for intermediate future Provides the quantity and timing of production for intermediate future Usually 3 to 18 months into future Usually 3 to 18 months into future Combines (‘aggregates’) production Combines (‘aggregates’) production Often expressed in common units Often expressed in common units Example: Hours, dollars, equivalents (e.g., FTE students) Example: Hours, dollars, equivalents (e.g., FTE students) Involves capacity and demand variables Involves capacity and demand variables Aggregate Scheduling

10 POM - J. Galván 10 Meet demand Meet demand Use capacity efficiently Use capacity efficiently Meet inventory policy Meet inventory policy Minimize cost Minimize cost Labor Labor Inventory Inventory Plant & equipment Plant & equipment Subcontract Subcontract Aggregate Scheduling Goals

11 POM - J. Galván 11 Aggregate Planning Strategies Pure Strategies Capacity Options — change capacity: Capacity Options — change capacity: changing inventory levels changing inventory levels varying work force size by hiring or layoffs varying work force size by hiring or layoffs varying production capacity through overtime or idle time varying production capacity through overtime or idle time subcontracting subcontracting using part-time workers using part-time workers

12 POM - J. Galván 12 Aggregate Planning Strategies Pure Strategies Demand Options — change demand : Demand Options — change demand : influencing demand influencing demand backordering during high demand periods backordering during high demand periods counterseasonal product mixing counterseasonal product mixing

13 POM - J. Galván 13 Aggregate Planning Options - Advantages and Disadvantages OptionAdvantageDisadvantage Some Comments Changing INVENTORY levels Changes in inventories are gradual, not abrupt production changes Inventory holding costs; shortages resulting in lost sale may occur if demand increases Applies mainly to production, not service settings Varying WORKFORCE SIZE by hiring or layoffs Avoids use of other alternatives Hiring, layoff, and training costs Used where many unskilled people seek extra income

14 POM - J. Galván 14 Advantages/Disadvantages - continued OptionAdvantageDisadvantage Some Comments Varying PRODUCTION RATES through overtime or idle time Matches seasonal fluctuations without hiring/training costs Overtime premiums, tired workers, may not meet demand Allows flexibility within the aggregate plan 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

15 POM - J. Galván 15 Advantages/Disadvantages - continued OptionAdvantageDisadvantage Some Comments Using PART- TIME WORKERS Less costly and more flexible than full-time workers High turnover/training costs; quality suffers; scheduling difficult Good for unskilled jobs in areas with large temporary labor pools Influencing DEMAND Tries to use excess capacity. Discounts draw new customers. Uncertainty in demand. Hard to match demand to supply exactly. Creates marketing ideas. Overbooking used in some businesses.

16 POM - J. Galván 16 Advantage/Disadvantage - continued OptionAdvantageDisadvantage Some Comments BACK ORDERING during high- demand periods May avoid overtime. Keeps capacity constant Customer must be willing to wait, but goodwill is lost. Many companies backlog. COUNTER SEASONAL products and service mixing Fully utilizes resources; allows stable workforce. May require skills or equipment outside a firm's areas of expertise. Risky finding products or services with opposite demand patterns.

17 POM - J. Galván 17 Mixed strategy Mixed strategy Combines 2 or more aggregate scheduling optionsCombines 2 or more aggregate scheduling options Level scheduling strategy Level scheduling strategy Produce same amount every day Produce same amount every day Keep work force level constant Keep work force level constant Vary non-work force capacity or demand options Vary non-work force capacity or demand options Often results in lowest production costs Often results in lowest production costs Aggregate Scheduling Strategies

18 POM - J. Galván 18 Graphical & charting techniques Graphical & charting techniques Popular & easy-to-understand Popular & easy-to-understand Trial & error approach Trial & error approach Mathematical approaches Mathematical approaches Transportation method Transportation method Linear decision rule Linear decision rule Management coefficients model Management coefficients model Simulation Simulation Aggregate Scheduling Methods

19 POM - J. Galván 19 The Graphical Approach to Aggregate Planning Forecast the demand for each period Forecast the demand for each period Determine the capacity for regular time, overtime, and subcontracting, for each period Determine the capacity for regular time, overtime, and subcontracting, for each period Determine the labor costs, hiring and firing costs, and inventory holding costs Determine the labor costs, hiring and firing costs, and inventory holding costs Consider company policies which may apply to the workers or to stock levels Consider company policies which may apply to the workers or to stock levels Develop alternative plans, and examine their total costs Develop alternative plans, and examine their total costs

20 POM - J. Galván 20 Simple to understand, easy to use. Many solutions; one chosen may not be optimal LP software available;permits sensitivity analysis and constraints. Linear function may not be realistic Simple, easy to implement; tries to mimic manager’s decision process; uses regression Trial and error Optimization Heuristic Comparison of Aggregate Planning Methods Charting/graphical methods Transportation method Management coefficient model Techniques Approaches Aspects

21 POM - J. Galván 21 Controlling the Cost of Labor in Service Firms Close control of labor hours to ensure quick response to customer demand Close control of labor hours to ensure quick response to customer demand Some form of-on-call labor resource that can be added or deleted to meet unexpected demand Some form of-on-call labor resource that can be added or deleted to meet unexpected demand Flexibility of individual worker skills to permit reallocation of available labor Flexibility of individual worker skills to permit reallocation of available labor Individual worker flexibility in rate of output or hours of work to meet demand Individual worker flexibility in rate of output or hours of work to meet demand


Download ppt "POM - J. Galván 1 PRODUCTION AND OPERATIONS MANAGEMENT Ch. 14: Aggregate Scheduling."

Similar presentations


Ads by Google