mba iind sem pom chapter 07 aggregateplanningsimplfied

8/14/2019 MBA IInd SEM POM Chapter 07 AggregatePlanningsimplfied

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Aggregate PlanningOperations Management

byP. Kalyanasundaram


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13-4

Types of OperationalPlanning Activities

TIME FRAME18 months 5+years

6-18 months

1 day 6 months

ACTIVITYLong-range planning

Medium-rangeplanning

Short-range planning


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ProductionPlanning


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The Role of the Aggregate

Plan


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Aggregate PlanningBased on composite (representative)products:

Simplifies calculationsForecasts for grouped items are moreaccurate

Considers trade-offs between holdinginventory & short-term capacitybased on workforce


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Aggregate Production

PlanningPurpose: specify the combination of production rate, workforce level, and

inventory on-hand that satisfies theforecasted demand at the lowest cost.Production rate: quantity of productproduced per unit of time (autos/day).Workforce level: number of workersrequired to meet a specific level of output.Inventory on hand: unsold units carriedover from one period to the next.


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13-6

Managing DemandPricingAdvertising and Promotion

Backlogs and ReservationsDevelop Alternative Products


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13-7

Managing Supply

(Capacity)Overtime/UndertimeHiring/Firing of Personnel

Temporary/Part-time PersonnelSubcontractingAdjusting InventoriesAdjusting Lead Times


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13-5

Objectives and

ApproachesObjectives:Match Supply and Demand (Effectiveness)

Minimize Costs (Efficiency)ApproachesReactive approach:

Allow volume forecasts based on Marketingplan to drive production planning

Proactive approach:Coordinate Marketing & Production plans tolevel demand using advertising & price

incentives


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Aggregate Plan StrategiesChase strategy:Match the production rate to meet thedemand rate by adjusting the workforcelevel (hiring/firing) as the demand ratechanges. Minimize finished goodinventories by matching demandfluctuations.

Level strategy:Use a stable workforce working at aconstant production rate. Use

inventories and backorders to absorbdemand eaks and valle s.


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Pure Aggregate Strategies


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Planning Links to MPS


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Role of the MPSAggregate plan:

Specifies the resources available ( e.g .:

regular workforce, overtime,subcontracting, allowable inventorylevels & shortages)

Master production schedule:Specifies the number & when to produceeach end item (the anticipated buildschedule)

Disaggregates the aggregate plan


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Objectives of Master

ScheduleThe Master Scheduler must:Maintain the desired customer service

levelUtilize resources efficientlyMaintain desired inventory levels

The Master Schedule must:Satisfy customer demandNot exceed Operations capacityWork within the constraints of the

Aggregate Plan


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Developing an MPSThe Master Scheduler:

Develops a proposed MPSChecks the schedule for feasibility with

available capacityModifies as needed

Authorizes the MPSConsider the following example:

Make-to-stock environment with fixed orders of 125 units There are 110 in inventory to startWhen are new order quantities needed tosatisfy the forecasted demand?


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The MPS Record

Projected Available = beginning inventory + MPS shipments - forecasted demand

The MPS row shows when replenishment shipments need to arrive toavoid a stock out (negative projected available)

W e e k BI 1 2 3 4 5 6 7 8 9 10 11 12

Forec as t 50 50 50 50 75 75 75 75 50 50 50 50

P rojec ted available 110 60 10 -40

M P S

W e e k B I 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2

F orec as t 50 50 50 50 75 75 75 75 50 50 50 50

P rojec ted available 1 10 60 10 85 35 -40

M P S 125


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Revised and Completed MPSRecord

W e e k BI 1 2 3 4 5 6 7 8 9 10 11 12

Forec as t 50 50 50 50 75 75 75 75 50 50 50 50

P rojec ted available 110 60 10 85 35 85 10 -65

M PS 125 125

W e e k BI 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 50 50 50 50 75 75 75 75 50 50 50 50

P rojec ted available 110 60 10 85 35 85 10 60 110 60 10 85 35

M PS 125 125 125 125 125


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Evaluating the MPSRough-cut capacity planning:

An estimate of the plans feasibility

Given the demonstrated capacity of critical resources (e.g.: direct labor &machine time), have we overloaded thesystem?

Customer service issues:Does available-to-promise inventorysatisfy customer orders? If not, can

future MPS quantities be pulled in to

mba iind sem pom chapter 07 aggregateplanningsimplfied

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