Transcript Sales & Operations Management

Advanced Concepts in
Sales & Operations
Planning
Chapter 12
MPC – 5th Edition
Topics
Mathematical programming
approaches
 Other approaches
 The “Disaggregation” concept
 Example “Lawn King”.
 Application potential

Mathematical Programming
Approaches

Linear Programming (p. 413)

Features of this model
• Aggregate production and demand is in hours.
• Captures hiring and firing each period (but not
integer).
• Allows idle time.

Mixed Integer Programming (p. 415)

Features of this model
• Product family – setup required to produce in a
period.
• Otherwise similar to the first model.
Disaggregation – the
concept
The idea is to link the aggregate plan
to the master schedule and possibly
even to lower level plans in a direct
manner.
 Hierarchical Production Planning


This gets at the concept of
disaggregation in a very high level and
comprehensive manner. See next
slide…
Disaggregation through
Mathematical Programming

The Chung and Krajewski Model

Features
• An input to this model is the solution to their mixed
integer programming aggregate planning model.
• This model tries to hit the production and inventory
levels established by the aggregate planning
model.
• The result is a detailed master schedule that
specifies lot size and timing for individual end
products.
Hierarchical Planning
Organizational Level
Planning Detail
Top corporate
management
Plant and division
management
Assign product family
groups to factories
Aggregate plan for each
factory
Plant and department
management
Department
management and
master scheduler
MRP planners and
purchasing personnel
Schedule family
groupings
Schedule items
Component-part
scheduling
A Sequential Production
Planning Process
Long-term
capacity planning
Demand
forecasts
Aggregate
production planning
Master
production scheduling
Resource
requirements planning
Necessary
modifications
Detailed planning and
Scheduling (MRP)
Implementation
Necessary
modifications
Concluding Principles
Guarded optimization that more
advanced models will be used in the
future.
 Tools are now becoming available that
are powerful enough to handle real
industrial sized problems.
