Scribd
Upload
5 views

Aggregate Plannig

aggregate plannig

Uploaded by

abubakartaufiq91
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
5 views

Aggregate Plannig

aggregate plannig

Uploaded by

abubakartaufiq91
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 8

Aggregate Planning

Aggregate Planning

• Aggregate planning are;

• Part of a larger production planning system


• Decisions made at a product family (not SKU) level
• Disaggregation breaks the plan down into greater detail
• Disaggregation results in a master production schedule (MPS)
• The objective of aggregate planning is to meet forecasted demand while minimizing cost over
the planning horizon
• Required for aggregate Planning;

• A logical overall unit for measuring sales and output


• A method for determining costs
• A forecast of demand for an intermediate planning period in these aggregate terms
• A model that combines forecasts and costs so that scheduling decisions can be made for the
planning period
• Determine the quantity and timing of production for the intermediate future (3 – 18 months)
• Cost minimization is achieved by adjusting below entities;

✓ Production rates
✓ Labor levels
✓ Inventory levels
✓ Overtime work
✓ Subcontracting rates
✓ Other controllable variables
Aggregate planning strategies
• Use inventories to absorb variations in demand
• Accommodate changes by varying workforce size
• Use part timers, overtime, or idle time to absorb changes
• Use subcontractors and maintain a stable workforce
• Promotions or other factors to influence demand
Aggregate planning methods
• Chase Strategy:
✓ Produce exactly what is demanded during the period in which it
is demanded
• Level Strategy:
✓ Produce an amount equal to the average demand for all periods
in the planning horizon
• Hybrid Strategy:
✓ Various combinations of the above
Chase strategy

• Production rate is synchronized with demand by varying machine capacity or hiring and laying-off
workers as the demand rate varies
• Expensive if cost of varying capacity is high
• However, in practice, it is often difficult to vary capacity and workforce on short notice
• Negative effect on workforce morale results in low levels of inventory
• Should be used when inventory holding costs are high and cost of changing capacity are low
Level strategy
• Shortages and surpluses result in fluctuations in inventory levels over
time
• Inventories that are built up in anticipation of future demand or
backlogs are carried over from high to low demand periods
• Maintain stable machine capacity and workforce levels with a
constant output rate
• Better for worker morale
• Should be used when inventory holding and backlog costs are
relatively low
• Large inventories and backlogs may accumulate

You might also like