1. Operations Management Aggregate Planning
Aggregation
Relationship to Other Plans
Reactive vs. Aggressive Alternatives
Aggregate Planning Strategies
Planning with Spreadsheets
Planning with Mathematical Models
MBA782.Aggr.Plng

2. Goal: Specify the ____________ combination of
Aggregate Planning Overview Problem Context
Aggregate Plan is....
statement of ____________ rates, _____________ levels, and _______________ holdings based on customer demands and capacity limitations
Goal: Specify the ____________ combination of
production rate
workforce level
inventory on hand
that _____________ all relevant costs.
MBA782.Aggr.Plng

3. Generalize the problem too ____ to solve for each individual product
Aggregate Planning Overview Aggregation
Translation of annual business plans into ______ labor and output plans for the ________________ term
Generalize the problem
too ____ to solve for each individual product
Aggregate quantities into broad categories or product groups
Intermediate Range
MBA782.Aggr.Plng

4. ____ to _______ months Long-range planning
Aggregate Planning Overview Planning Horizons
Long-range planning
Greater than _____ year planning horizon
Intermediate-range planning
____ to _______ months
Short-range planning
One day to less than ____ months
MBA782.Aggr.Plng

5. Brings operations, finance, and marketing __________ Manufacturing....
Aggregate Planning Relationship to Other Plans
Brings operations, finance, and marketing __________
Manufacturing....
business plan
a ______________ of income, costs, and profits
_________________ plan
sets production rates, inventory levels, and work-force levels for a product family
____________ production schedule
specifies _________ and productions __________
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6. Service Aggregate Planning Overview Relationship to Other Plans
Capacity
Requirements
Plan (CRP)
Master
Production
Schedule (MPS)
Plan
Material
Plan (MRP)
Work-force
Schedule)
Staffing
Business
Manufacturing
Service
Aggregate
Plans
MBA782.Aggr.Plng

7. Should inventories be used to absorb changes in demand?
Aggregate Production Planning Production Planning Environment
Should inventories be used to absorb changes in demand?
Should the ______ of the workforce vary?
Should part-time, overtime, and/or undertime be used?
Should sub-contractors be used to maintain a stable workforce?
Should price or other factors be changed to influence demand?
MBA782.Aggr.Plng

8. Accept demand forecast as a given, and
Production Planning Environment Capacity Management Options
Accept demand forecast as a given, and
_______ to fluctuations in demand.
Resources:
changing inventory levels
varying work force size by hiring or layoffs
varying production capacity through overtime or idle time
subcontracting
using part-time workers
MBA782.Aggr.Plng

9. _________ the demand pattern to achieve
Production Planning Environment Demand Management Options
_________ the demand pattern to achieve
efficiency and reduce costs.
Resources:
competitive pricing and promotion
counter-seasonal product mixing
backordering during high demand periods
MBA782.Aggr.Plng

10. Keep the work-force level __________ not hiring or laying off workers
Aggregate Production Planning Production Planning Strategies
Level Strategy
Keep the work-force level __________
not hiring or laying off workers
Vary _____-workforce capacity or demand options
Advantage of level output rates and ________ work force
Disadvantages of
increased inventory investment, and
increased undertime and overtime expenses
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11. Aggregate Production Planning Production Planning Strategies
Level Strategy
MBA782.Aggr.Plng

12. uses _______ ___ ________ to match demand
Aggregate Production Planning Production Planning Strategies
Chase Strategy
production _________ demand
uses _______ ___ ________ to match demand
does not include building of anticipation inventory
produces ___________ inventory investment.
expense of adjusting work-force size
potential alienation of workforce, loss of productivity, and lower quality
favored by service organizations because inventory is difficult if not impossible to adopt
MBA782.Aggr.Plng

13. Aggregate Production Planning Production Planning Strategies
Chase Strategy
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14. Neither a pure level or pure chase strategy
Aggregate Production Planning Production Planning Strategies
Mixed Strategy
Neither a pure level or pure chase strategy
work force level is not exactly level, and
does not exactly match demand on a period-by-period basis
Fitting the Situation
The best strategy must fit the companies
environment, and
competitive priorities
MBA782.Aggr.Plng

15. Aggregate Production Planning Production Planning Strategies
Mixed Strategy
MBA782.Aggr.Plng

16. __________ in production levels
Aggregate Production Planning Relevant Costs
Relevant costs to consider and include:
Basic production (labor) costs
regular time and overtime
__________ in production levels
hiring, training, layoff
Inventory costs ( _________ costs):
storage, insurance, taxes,spoilage, obsolescence
Backorder and stockout costs ( ___________ costs):
expediting, goodwill, lost sales
MBA782.Aggr.Plng

17. Cut-and-Try charting and graphic methods
Aggregate Planning Aggregate Planning Techniques
Cut-and-Try charting and graphic methods
trial & error approach
cost out _______________ plans and pick the _______ one
popular & easy-to-understand
Mathematical approaches
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18. Forecast of demand for each period
Aggregate Planning Techniques Cut-and-Try
Forecast of demand for each period
Determine the ____________ for regular time, overtime, and subcontracting, for each period
Determine the labor ______, hiring and firing costs, and inventory holding costs
Consider company policies which may apply to the workers or to stock levels
Develop ______________ plans, and examine their total costs
MBA782.Aggr.Plng

19. Use a spreadsheet approach for stating a strategy, developing a plan,
Aggregate Planning Techniques Using Spreadsheets
Use a spreadsheet approach for
stating a strategy,
developing a plan,
identifying possible improvements, and
modify until we are satisfied.
Components of a spreadsheet are:
input values
derived values, and
calculated costs.
MBA782.Aggr.Plng

20. Number of working days:
Using Spreadsheets Aggregate Planning Example
Number of working days:
Jan 22
Feb 19
Mar 22
Apr 21
May 22
Jun 20
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21. Using Spreadsheets Aggregate Planning Example
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22. Using Spreadsheets Level Strategy Example
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23. Using Spreadsheets Level Strategy Example
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24. Using Spreadsheets Level Strategy Example
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25. Using Spreadsheets Level Strategy Example
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26. Using Spreadsheets Chase Strategy Example
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27. Using Spreadsheets Chase Strategy Example
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28. Using Spreadsheets Chase Strategy Example
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29. Using Spreadsheets Chase Strategy Example
MBA782.Aggr.Plng

30. Transportation algorithm Linear Programming Simulation
Aggregate Planning Methods Aggregate Planning with Mathematical Models
Mathematical Models
Transportation algorithm
Linear Programming
Simulation
Managerial considerations
Mathematical techniques are ___________ aids to the planning process
Planning process is dynamic and complicated by _______________ objectives
Manager - not _______________ - make decisions
MBA782.Aggr.Plng

31. Aggregate Planning Workforce Issues in Service Firms
Close control of labor hours to ensure ________ response to customer demand
Some form of ___ - ______ labor resource that can be added or deleted to meet unexpected demand
Flexibility of individual worker skills to permit ______________ of available labor
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32. Concepts / Terminology Review Lecture notes Recommended Problems none
Aggregate Planning Chapter Wrap-Up
Read Chapter 12
Concepts / Terminology
Review Lecture notes
Recommended Problems
none
MBA782.Aggr.Plng