Transcript Aggregate Planning - Texas Tech University

Chapter 13
Aggregate Planning
Operations Management - 5th Edition
Roberta Russell & Bernard W. Taylor, III
Copyright 2006 John Wiley & Sons, Inc.
Beni Asllani
University of Tennessee at Chattanooga
Lecture Outline
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Aggregate Planning Process
Strategies for Adjusting Capacity
Strategies for Managing Demand
Quantitative Techniques for Aggregate
Production Planning
 Hierarchical Nature of Planning
 Aggregate Planning for Services
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Aggregate Planning
 Determine the resource capacity needed to
meet demand over an intermediate time
horizon
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Aggregate refers to product lines or families
Aggregate planning matches supply and demand
 Objectives
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Establish a company wide game plan for allocating
resources
Develop an economic strategy for meeting
demand
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Aggregate Planning Process
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Meeting Demand Strategies
 Adjusting capacity
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Resources necessary to meet demand
are acquired and maintained over the
time horizon of the plan
Minor variations in demand are handled
with overtime or under-time
 Managing demand
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Proactive demand management
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Strategies for Adjusting Capacity
 Level production
 Overtime and under-time
Producing at a constant rate
 Increasing or decreasing
and using inventory to
working hours
absorb fluctuations in
 Subcontracting
demand
 Let outside companies
 Chase demand
complete the work
 Hiring and firing workers to
 Part-time workers
match demand
 Hiring part time workers to
 Peak demand
complete the work
 Maintaining resources for
 Backordering
high-demand levels
 Providing the service or
product at a later time period
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Level Production
Demand
Units
Production
Time
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Chase Demand
Demand
Units
Production
Time
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Strategies for Managing Demand
 Shifting demand into
other time periods
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Incentives
Sales promotions
Advertising campaigns
 Offering products or
services with countercyclical demand patterns
 Partnering with suppliers
to reduce information
distortion along the
supply chain
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Quantitative Techniques For APP
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Pure Strategies
Mixed Strategies
Linear Programming
Transportation Method
Other Quantitative
Techniques
Copyright 2006 John Wiley & Sons, Inc.
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