Professional Documents
Culture Documents
Operations Management
William J. Stevenson
8th edition
CHAPTER
12
Aggregate Planning
McGraw-Hill/Irwin
Planning Horizon
Aggregate planning: Intermediate-range
capacity planning, usually covering 2 to 12
months.
Long range
Short
range
Now
Intermediate
range
2 months
1 Year
Long-range plans
Long term capacity
Location / layout
Planning Sequence
Figure 12.1
Corporate
strategies
and policies
Economic,
competitive,
and political
conditions
Aggregate
demand
forecasts
Business Plan
Establishes operations
and capacity strategies
Aggregate plan
Establishes
operations capacity
Master schedule
Establishes schedules
for specific products
Resources
Workforce
Facilities
Demand forecast
Policies
Subcontracting
Overtime
Inventory levels
Back orders
Costs
Inventory carrying
Back orders
Hiring/firing
Overtime
Inventory changes
subcontracting
Inventory
Output
Employment
Subcontracting
Backordering
Proactive
Reactive
Mixed
Some of each
Demand Options
Pricing
Promotion
Back orders
New demand
Capacity Options
Hire and layoff workers
Overtime/slack time
Part-time workers
Inventories
Subcontracting
Basic Strategies
Chase Approach
Advantages
Disadvantages
Level Approach
Advantages
Disadvantages
2.
3.
4.
5.
6.
Cumulative Graph
Cumulative output/demand
Figure 12.3
Cumulative
production
Cumulative
demand
2
10
Average Inventory
Mathematical Techniques
Linear programming: Methods for obtaining
optimal solutions to problems involving
allocation of scarce resources in terms of
cost minimization.
Linear decision rule: Optimizing technique
that seeks to minimize combined costs, using
a set of cost-approximating functions to
obtain a single quadratic equation.
Technique
Solution
Characteristics
Graphical/charting
Trial and
error
Linear
programming
Linear
decision rule
Optimizing
Simulation
Trial and
error
Optimizing
Disaggregation
Master
Schedule
Master Scheduling
Master schedule
Determines quantities needed to meet demand
Interfaces with
Marketing
Capacity planning
Production planning
Distribution planning
Master Scheduler
Evaluates impact of new orders
Provides delivery dates for orders
Deals with problems
Production delays
Revising master schedule
Insufficient capacity
Outputs
Beginning inventory
Forecast
Customer orders
Projected inventory
Master
Scheduling
Projected on-hand
=
inventory
Inventory from
previous week
Current weeks
requirements
64
Forecast
Customer Orders
(committed)
Projected on-hand
inventory
Customer orders are
larger than forecast in
week 1
1
30
JUNE
2
3
30 30
4
30
5
40
33
20
10
31
-29
JULY
6
7
40 40
8
40
Figure 12.12
Period
frozen
(firm or
fixed)
slushy
somewhat
firm
liquid
(open)