AGGREGATE PLANNING

1. What is aggregate planning? In production planning, it is the intermediaterange capacity planning that typically covers a time horizon of 2 to 12 months.

2. What is the purpose of aggregate planning? The purpose of aggregate planning is planning ahead because it takes time to implement plans. The second reason is strategic of the company and third aggregate planning help synchronize flow throughout the supply chain; it affects costs, equipment utilization, employment levels and customer satisfaction. 3. List the demand options in aggregate planning? 1. Price 2. Promotion 3. Back orders 4. New demand

4. List the capacity options in aggregate planning 1. Hire and lay off workers 2. Overtime/slack time 3 part-time workers 4. Inventories 5. Subcontracting 5. List the main strategies for meeting uneven demand. 1. Maintain a level of workforce 2. Maintain a steady output rate 3. Match demand period by period 4. Use a combination of decision variables 6. Name two important factors that influence choice of strategy. They are company policy, which may set constraints on the available options the extent to which they can be used and cost also influence choice strategy.
7. Briefly describe the informal, trial and error approach to aggregate planning. Trial-and-error approach of planning consist of developing simple tables or graphs that enable planners to visually compare projected demand requirements with existing capacity. 8. What difficulties do services pose for aggregate planning? 1. Services occur when they are rendered-most services cant be inventories and services capacity that goes unused is wasted. 2. Demand for services can be difficult to predict. There is a greater burden for service providers to anticipate demand; therefore they have to pay careful attention to planned

capacity levels. 3. Capacity availability can be difficult to predict. In services, the types of variety of task are more pervasive than compare with manufacturer and this makes it difficult to establish measures of capacity. 9. Explain these terms: Disaggregating the aggregate plan- this means breaking down the aggregate plan into specific product requirements in order to determine labor requirement (skills, size, or workforce), materials, and inventory requirements. Master schedule- the result of disaggregating the aggregate plan is master schedule showing the quantity and timing of specific end items for a scheduled horizon that covers about six to eight weeks ahead. Rough-cut capacity planning-this involves testing the feasibility of a proposed master schedule relative to available capacities, to assure that no obvious capacity constraints exist. It means checking capacities of production and warehouse facilities, labor, and vendors to ensure that no gross deficiencies exist that will render the master schedule unworkable. ATP or Available to Promise inventory- the master schedule process uses this information on a period-by-period basis to determine the projected inventory, production requirements and the resulting uncommitted inventory. 10. Why is it important to stabilize the master schedule? Master schedule enables marketing to make valid delivery, enables production to evaluate capacity requirements, and provides necessary information for production, marketing and senior management with opportunity to determine whether the business plan and its strategic objectives will be achieved. 11. How are master schedules stabilized? By the master scheduling process which involves the input and outputs. 12. The duties of the master scheduler generally include: 1. evaluating the impact of new orders. 2. Providing delivery dates for orders. 3. Dealing with problems: a. evaluating the impact of production delays or late deliveries of purchased goods. b. Revising the master schedule when necessary because of insufficient supplies of capacity. c. Bringing instances of insufficient capacity to the attention of production and marketing personnel so that they can participate in resolving conflicts.

13. List the inputs and outputs of master scheduling: Inputs- the beginning inventories, which is actual quantity on hand from the preceding period; the forecasts for each period of the schedule; and the customer orders, which are quantities already committed to customers. Outputs- Projected inventory, master production schedule and uncommitted inventory. 14. What are time fences? Are use to facilitate order promising and the entry of orders into the system? It divides a scheduling time horizon into three phases, frozen, slushy and liquid.

Briefly describe these scheduling phases: Frozen-is the near term-phases that is so soon that delivery of a new order would be impossible, or only possible using very costly or extraordinary options such as delaying another order. Slushy- is the second phase, and its time fence is usually a few periods beyond the frozen phase.| Liquid-is the farthest out on the time horizon.
Aggregate planning is an operational activity that does an aggregate plan for the production process, in advance of 2 to 18 months, to give an idea to management as to what quantity of materials and other resources are to be procured and when, so that the total cost of operations of the organization is kept to the minimum over that period.. The quantity of outsourcing, subcontracting of items, overtime of labour, numbers to be hired and fired in each period and the amount of inventory to be held in stock and to be backlogged for each period are decided. All of these activities are done within the framework of the company ethics, policies, and long term commitment to the society, community and the country of operation. Aggregate planning has certain prerequired inputs which are inevitable. They include: Information about the resources and the facilities available. Demand forecast for the period for which the planning has to be done. Cost of various alternatives and resources. This includes cost of holding inventory, ordering cost, cost of production through various production alternatives like subcontracting, backordering and overtime. Organizational policies regarding the usage of above alternatives.

"Aggregate Planning is concerned with matching supply and demand of output over the medium time range, up to approximately 12 months into the future. Term aggregate implies that the planning is done for a single overall measure of output or, at the most, a few aggregated product categories. The aim of aggregate planning is to set overall output levels in the near to medium future in the face of fluctuating or [citation needed] uncertain demands. Aggregate planning might seek to influence demand as well as supply."

Contents
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1 Aggregate Plan Strategies

o o o

1.1 Level plans 1.2 Chase plans 1.3 Hybrid Strategies

2 Problems related to Aggregate Planning 3 Further reading

[edit]Aggregate [edit]Level

Plan Strategies

plans

Use a constant workforce & produce similar quantities each time period Use inventories and backorders to absorb demand peaks & valleys

[edit]Chase

plans

Minimize finished good inventories by trying to keep pace with demand fluctuations Matches demand by varying either work force level or output rate

[edit]Hybrid

Strategies

Build-up inventory ahead of rising demand and use backorders to level extreme peaks Layoff or furlough workers during lulls Subcontract production or hire temporary workers to cover short-term peaks Reassign workers to preventive maintenance during lulls

[edit]Problems Smoothing

related to Aggregate Planning

Smoothing refers to costs that result from changing production and workforce levels from one period to the next.

Bottleneck Problems It is the inability of the system to respond to sudden changes in demand as a result of capacity restrictions.

Planning Horizon The number of periods for which the demand is to be forecasted , and hence the number of periods for which workforce and inventory levels are to be determined, must be specified in advance.

Treatment of Demand Aggregate planning methodology requires the assumption that demand is known with certainity

The systematic layout planning (SLP) is a tool used to arrange a workplace in a plant by locating two [1] areas with high frequency and logical relationships close to each other. The process permits the quickest material flow in processing the product at the lowest cost and least amount of handling. [edit]Levels

of plant layout design

There are four levels of detail in plant layout design, 1. Site layout: shows how the building should be located in a proper way. 2. Block layout: shows the sizes of departments in the buildings. 3. Detailed layout: shows the arrangements of equipments and workstations in the departments. 4. Workstation layout: shows the locations of every part of the workstation.