Aggregate Planning CH 14 Flashcards
What are the three levels of planning?
Long term, intermediate term, short term
What is aggregate planning? What is its purpose?
It is an intermediate term plan, 2-18 months, which is used to try and balance supply with demand in an effort to minimize cost
Why is there a need for aggregate planning?
Aggregate plan is necessary because it takes time to adjust capacity, so short term planning is not effective. Long term planning is generally restricted to big capital items such as machinery (purchase/sale), factory (build/close), etc
What are the most common decision variables for aggregate planning in mfg setting?
Resources - workforce size
Demand forecast
Policies - subcontr, OT, inv. levels
Costs - inventory, hiring/firing, subcontr
What are the inputs to master scheduling?
3 items:
- Beginning inventory
- Forecasts for each period
- And customer orders (which are already committed)
What is the master schedule?
It is a disaggregate of the aggregate plan. it shows the quantity and timing of specific items for a scheduled horizon.
What are the four strategies to meet uneven demand?
- Maintain a level workforce
- Maintain a steady output rate
- Match demand period by period
- Combination of both
Level Capacity Strategy
Variations in demand are met by a combination of inventories, overtime, part time works, subcontractors and backorders
Chase Demand Strategy
The planned output for any period is equal to the demand for the period.
Technique for AP
- Determine demand
- Determine capacities
- Identify pertinent policies (layoff policies, stocking policies)
- Determine unit costs for reg time, overtime, subcontr. holding inv., back orders, layoffs, etc
- Develop alt. plans and costs for each
- If satisfactory plans emerge, select the best. otherwise return to step 5.
