6 ch 8 Aggregate Planning.ppt
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This document discusses aggregate planning. The objective of aggregate planning is to meet forecasted demand while minimizing costs over the planning period. It involves adjusting production rates, labor levels, inventory levels, overtime, subcontracting, and other variables. Aggregate planning requires a forecast of demand, a method for determining costs, and a model that combines forecasts and costs to determine a scheduling plan. It considers options like using inventory, varying workforce size, overtime/idle time, subcontracting, and influencing demand to balance capacity with fluctuating demand levels over the planning period.
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Chapter 13Inventory Management© McGraw-Hill Education. All r.docx
Chapter 13
Inventory Management
© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
1
Learning Objectives (1 of 2)
You should be able to:
13.1 Define the term inventory
13.2 List the different types of inventory
13.3 Describe the main functions of inventory
13.4 Discuss the main requirements for effective management
13.5 Explain periodic and perpetual review systems
13.6 Describe the costs that are relevant for inventory management
13.7 Describe the A-B-C approach and explain how it is useful
13-‹#›
© McGraw-Hill Education.
Learning Objectives (2 of 2)
13.8 Describe the basic EOQ model and its assumptions and solve typical problems
13.9 Describe the economic production quantity model and solve typical problems
13.10 Describe the quantity discount model and solve typical problems
13.11 Describe reorder point models and solve typical problems
13.12 Describe situations in which the fixed-order interval model is appropriate and solve typical problems
13.12 Describe situations in which the single-period model is appropriate, and solve typical problems
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.1
Inventory
Inventory
A stock or store of goods
Independent demand items
Items that are ready to be sold or used
Inventories are a vital part of business: (1) necessary for operations and (2) contribute to customer satisfaction
A “typical” firm has roughly 30% of its current assets and as much as 90% of its working capital invested in inventory
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.2
Types of Inventory
Raw materials and purchased parts
Work-in-process (WIP)
Finished goods inventories or merchandise
Tools and supplies
Maintenance and repairs (MRO) inventory
Goods-in-transit to warehouses or customers (pipeline inventory)
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.3
Inventory Functions
Inventories serve a number of functions such as:
To meet anticipated customer demand
To smooth production requirements
To decouple operations
To protect against stockouts
To take advantage of order cycles
To hedge against price increases
To permit operations
To take advantage of quantity discounts
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.3
Objectives of Inventory Control
Inventory management has two main concerns:
Level of customer service
Having the right goods available in the right quantity in the right place at the right time
Costs of ordering and carrying inventories
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Measures of performance
Customer satisfaction
Number and quantity of backorders
Customer complaints
Customer satisfaction
Inventory turnover
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.4
Effective Inventory Mana.
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1. Aggregate planning involves determining production levels and workforce needs over an intermediate time horizon of 3-18 months to minimize costs while meeting demand.
2. Strategic objectives include minimizing costs, smoothing workforce fluctuations, reducing inventory levels, and maintaining service levels. Cost minimization is often the primary focus.
3. Mixed strategies that use multiple approaches like overtime, subcontracting, hiring, and layoffs are generally better than pure strategies that only vary one factor.
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- Inventory constitutes a significant part of current assets for many companies, often around 60% of current assets. Effective inventory management is important to avoid unnecessary costs and ensure profitability.
- There are different types of inventory including raw materials, work in progress, and finished goods. The objectives of inventory management are to maintain optimal inventory levels for smooth operations while minimizing costs.
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Operations ppt
Aggregate planning is a form of operations management that focuses on satisfying expected demand over a planning horizon, typically 3-18 months in the future. It considers factors like production levels, workforce sizes, inventory levels, and aims to maximize customer service while minimizing costs related to inventory, workforce changes, and production rate fluctuations. Aggregate planning can be done intuitively based on experience, or more formally using techniques like linear programming to find optimal solutions. The goal is to match supply and demand in the most efficient way possible.
Aggregate planning
Aggregate planning is a form of operations management that focuses on satisfying expected demand over a planning horizon, typically 3-18 months in the future. It considers factors like production levels, workforce sizes, inventory levels, and aims to maximize customer service while minimizing costs associated with inventory, labor changes, and production rate changes. Aggregate planning can be done intuitively based on experience, or more formally using techniques like linear programming to find optimal solutions. The goal is to match supply and demand in the most efficient way possible.
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This document discusses capacity planning and control. It defines capacity as the maximum amount of work an organization can perform over a given period of time. Key aspects of capacity planning include measuring demand through forecasting, identifying alternative capacity plans like maintaining a constant level, chasing demand, or managing demand, and choosing the most appropriate plan. The document also covers measuring and improving capacity, dealing with seasonality, and using tools like cumulative representation and queuing theory to evaluate different capacity strategies.
Mps vs aggregate planning
Aggregate planning is an intermediate production plan that spans 2-18 months to determine resource procurement quantities and timing to minimize total costs. It considers inputs like workforce, facilities, demand forecasts, and costs. Strategies include proactively altering demand, reactively altering capacity, or using both. The master production schedule converts the aggregate plan into a schedule of individual products over a shorter time period like weeks. It lists products, completion dates, and quantities including firm orders, forecasts, and spare parts. Aggregate planning and the MPS differ in their timeframes, with aggregate planning using months and MPS using weeks.
Aggregate Planning
This document outlines key aspects of aggregate planning including:
- Aggregate planning matches supply and demand over an intermediate time horizon to determine necessary resource capacity. It balances demand forecasts with available resources.
- Strategies for adjusting capacity include level production, overtime/under-time work, subcontracting, and part-time hiring. Strategies for managing demand include shifting demand across time periods, incentives, and partnering with suppliers.
- Quantitative techniques for aggregate production planning include linear programming, transportation methods, linear decision rules, and management coefficients models. These help determine optimal production and capacity levels.
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Aggregate planning involves determining production levels on a weekly or monthly basis for the next 6-18 months based on marketing forecasts. It aims to minimize costs from fluctuating production levels like hiring/laying off workers. The document discusses level, chase, and hybrid aggregate planning strategies and their advantages like reducing overhead from excess inventory. It also outlines the aggregate planning process including determining demand and capacity, developing alternative plans, selecting the optimal plan, and disaggregating it through master scheduling and rough cut capacity planning.
Chapter 13Inventory Management© McGraw-Hill Education. All r.docx
Chapter 13
Inventory Management
© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
1
Learning Objectives (1 of 2)
You should be able to:
13.1 Define the term inventory
13.2 List the different types of inventory
13.3 Describe the main functions of inventory
13.4 Discuss the main requirements for effective management
13.5 Explain periodic and perpetual review systems
13.6 Describe the costs that are relevant for inventory management
13.7 Describe the A-B-C approach and explain how it is useful
13-‹#›
© McGraw-Hill Education.
Learning Objectives (2 of 2)
13.8 Describe the basic EOQ model and its assumptions and solve typical problems
13.9 Describe the economic production quantity model and solve typical problems
13.10 Describe the quantity discount model and solve typical problems
13.11 Describe reorder point models and solve typical problems
13.12 Describe situations in which the fixed-order interval model is appropriate and solve typical problems
13.12 Describe situations in which the single-period model is appropriate, and solve typical problems
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.1
Inventory
Inventory
A stock or store of goods
Independent demand items
Items that are ready to be sold or used
Inventories are a vital part of business: (1) necessary for operations and (2) contribute to customer satisfaction
A “typical” firm has roughly 30% of its current assets and as much as 90% of its working capital invested in inventory
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.2
Types of Inventory
Raw materials and purchased parts
Work-in-process (WIP)
Finished goods inventories or merchandise
Tools and supplies
Maintenance and repairs (MRO) inventory
Goods-in-transit to warehouses or customers (pipeline inventory)
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.3
Inventory Functions
Inventories serve a number of functions such as:
To meet anticipated customer demand
To smooth production requirements
To decouple operations
To protect against stockouts
To take advantage of order cycles
To hedge against price increases
To permit operations
To take advantage of quantity discounts
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.3
Objectives of Inventory Control
Inventory management has two main concerns:
Level of customer service
Having the right goods available in the right quantity in the right place at the right time
Costs of ordering and carrying inventories
The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs within reasonable bounds
Measures of performance
Customer satisfaction
Number and quantity of backorders
Customer complaints
Customer satisfaction
Inventory turnover
13-‹#›
© McGraw-Hill Education.
Learning Objective 13.4
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Aggregate planning involves matching supply and demand over the medium term of 12 months. It determines output levels and appropriate resource mixes. The key goals are to minimize costs associated with production rate changes, inventory holding, and backorders. Common strategies include maintaining a level output rate or chasing demand period to period. Linear programming and simulation techniques can be used to evaluate alternative aggregate plans.
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The document discusses strategies, the balanced scorecard, and strategic profitability analysis. It provides information on two generic strategies of product differentiation and cost leadership. It also describes the four perspectives of the balanced scorecard: financial, customer, internal business processes, and learning and growth. An example is provided of how a company reengineered its order delivery process. Key performance measures for each balanced scorecard perspective are also outlined.
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This document discusses capacity planning and aggregate production planning. It describes aggregate planning as intermediate-range planning that typically covers 2 to 18 months and aims to effectively utilize resources to match expected demand. The document outlines various aggregate planning strategies such as altering demand or capacity to match each other. It also discusses techniques for aggregate planning like graphical and mathematical models. Finally, it covers operations scheduling and sequencing, including priority rules.
Aggregate Production Planning (APP)
Aggregate Production Planning (APP) is a process that establishes a company-wide production plan to balance capacity and demand over an intermediate time horizon, typically 3 to 18 months in the future. APP expresses demand and production capacity in more general terms using product families rather than individual products. This allows planners more flexibility to deal with forecast uncertainty. The objective of APP is to minimize costs while meeting demand and utilizing resources effectively. Common APP strategies include maintaining a steady production rate and using inventory to absorb demand fluctuations (level strategy) or adjusting production levels to match fluctuating demand (chase strategy).
Aggregate Planning, Guide numericals
This document summarizes key concepts from a chapter on aggregate planning:
1. Aggregate planning involves determining production levels and workforce needs over an intermediate time horizon of 3-18 months to minimize costs while meeting demand.
2. Strategic objectives include minimizing costs, smoothing workforce fluctuations, reducing inventory levels, and maintaining service levels. Cost minimization is often the primary focus.
3. Mixed strategies that use multiple approaches like overtime, subcontracting, hiring, and layoffs are generally better than pure strategies that only vary one factor.
4. Mathematical models are not widely used for aggregate planning due to their complexity, and most aggregate planning is done through graphical or other simple methods.
CH13.PPT
This document provides an overview of aggregate planning concepts and methods. It includes outlines of chapter topics on aggregate planning, goals of aggregate planning, strategies for aggregate planning including capacity options and demand options, and advantages and disadvantages of different aggregate planning options. Graphical and mathematical methods for aggregate planning are also mentioned. The document contains learning objectives and discusses aggregate planning for both production and service operations.
Aggregate planning
S&O Planning translates strategic business plans into production rates to meet financial, customer service, and other goals. It continually updates production, financial, and sales plans through regular meetings with executives to resolve tradeoffs and validate resource availability. Production planning develops tactical plans based on setting overall manufacturing output levels to satisfy planned sales while meeting profitability and productivity goals. Aggregate planning focuses on product families or groups, maintaining inventory levels, determining resource needs, and comparing load to capacity. It aims to balance demand and capacity over time through strategies like leveling output or chasing demand, using options like inventory, overtime, hiring/layoffs, and subcontracting.
Capacity resource planning and production scheduling
Production scheduling and capacity resource planning are important for maximizing profits and competitiveness. Scheduling involves managing resources like materials, machines, and workers to create goods efficiently while meeting customer needs. Capacity planning determines the optimal level and timing of resources needed based on demand forecasts. It evaluates alternatives like expanding equipment or facilities using techniques like cost-volume analysis.
Session 4
The document discusses production planning systems including aggregate planning and master production scheduling. It provides an overview of different planning horizons and techniques for aggregate and master production scheduling. An example is given demonstrating how to develop a master production schedule over an 8 week planning horizon for 3 products considering demand forecasts, safety stocks and production capacity.
Inventory Management
- Inventory constitutes a significant part of current assets for many companies, often around 60% of current assets. Effective inventory management is important to avoid unnecessary costs and ensure profitability.
- There are different types of inventory including raw materials, work in progress, and finished goods. The objectives of inventory management are to maintain optimal inventory levels for smooth operations while minimizing costs.
- An optimum inventory level balances ordering costs, carrying costs, and stock-out costs. Both over-investment and under-investment in inventory can be dangerous for a company. Effective inventory management tracks inventory levels and determines when and how much to order.
Inventory Management
- Inventory constitutes a significant part of current assets for many companies, often around 60% of current assets. Effective inventory management is important to avoid unnecessary costs and ensure profitability.
- There are different types of inventory including raw materials, work in progress, and finished goods. The objectives of inventory management are to maintain optimal inventory levels for smooth operations while minimizing costs.
- An optimum inventory level balances ordering costs, carrying costs, and stock-out costs. Both over-investment and under-investment in inventory can be dangerous for a company. Effective inventory management tracks inventory levels and determines when and how much to order.
Operations ppt
Aggregate planning is a form of operations management that focuses on satisfying expected demand over a planning horizon, typically 3-18 months in the future. It considers factors like production levels, workforce sizes, inventory levels, and aims to maximize customer service while minimizing costs associated with inventory, labor changes, and production rate changes. Aggregate planning can be done intuitively based on experience, or more formally using techniques like linear programming to find optimal solutions. The goal is to match supply and demand in the most efficient way possible.
Operations ppt
Aggregate planning is a form of operations management that focuses on satisfying expected demand over a planning horizon, typically 3-18 months in the future. It considers factors like production levels, workforce sizes, inventory levels, and aims to maximize customer service while minimizing costs related to inventory, workforce changes, and production rate fluctuations. Aggregate planning can be done intuitively based on experience, or more formally using techniques like linear programming to find optimal solutions. The goal is to match supply and demand in the most efficient way possible.
Aggregate planning
Aggregate planning is a form of operations management that focuses on satisfying expected demand over a planning horizon, typically 3-18 months in the future. It considers factors like production levels, workforce sizes, inventory levels, and aims to maximize customer service while minimizing costs associated with inventory, labor changes, and production rate changes. Aggregate planning can be done intuitively based on experience, or more formally using techniques like linear programming to find optimal solutions. The goal is to match supply and demand in the most efficient way possible.
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This document discusses capacity planning and control. It defines capacity as the maximum amount of work an organization can perform over a given period of time. Key aspects of capacity planning include measuring demand through forecasting, identifying alternative capacity plans like maintaining a constant level, chasing demand, or managing demand, and choosing the most appropriate plan. The document also covers measuring and improving capacity, dealing with seasonality, and using tools like cumulative representation and queuing theory to evaluate different capacity strategies.
Mps vs aggregate planning
Aggregate planning is an intermediate production plan that spans 2-18 months to determine resource procurement quantities and timing to minimize total costs. It considers inputs like workforce, facilities, demand forecasts, and costs. Strategies include proactively altering demand, reactively altering capacity, or using both. The master production schedule converts the aggregate plan into a schedule of individual products over a shorter time period like weeks. It lists products, completion dates, and quantities including firm orders, forecasts, and spare parts. Aggregate planning and the MPS differ in their timeframes, with aggregate planning using months and MPS using weeks.
Aggregate Planning
This document outlines key aspects of aggregate planning including:
- Aggregate planning matches supply and demand over an intermediate time horizon to determine necessary resource capacity. It balances demand forecasts with available resources.
- Strategies for adjusting capacity include level production, overtime/under-time work, subcontracting, and part-time hiring. Strategies for managing demand include shifting demand across time periods, incentives, and partnering with suppliers.
- Quantitative techniques for aggregate production planning include linear programming, transportation methods, linear decision rules, and management coefficients models. These help determine optimal production and capacity levels.
Similar to 6 ch 8 Aggregate Planning.ppt (20)
Chapter 13Inventory Management© McGraw-Hill Education. All r.docx
Chapter 13Inventory Management© McGraw-Hill Education. All r.docx
Capacity resource planning and production scheduling
Capacity resource planning and production scheduling
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选择实体注册公司办理，更放心，更安全！我们的承诺：可来公司面谈，可签订合同，会陪同客户一起到教育部认证窗口递交认证材料，客户在教育部官方认证查询网站查询到认证通过结果后付款，不成功不收费！
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6 ch 8 Aggregate Planning.ppt
- 1. 13 - 1 OM Chapter 8 Aggregate Planning
- 2. 13 - 2 OM Aggregate Planning The objective of aggregate planning is to meet forecasted demand while minimizing cost over the planning period
- 3. 13 - 3 OM The Planning Process Objective is to minimize cost over the planning period by adjusting Production rates Labor levels Inventory levels Overtime work Subcontracting rates Other controllable variables Determine the quantity and timing of production for the intermediate future
- 4. 13 - 4 OM Aggregate Planning A logical overall unit for measuring sales and output A forecast of demand for an intermediate planning period in these aggregate terms A method for determining costs A model that combines forecasts and costs so that scheduling decisions can be made for the planning period Required for aggregate planning
- 5. 13 - 5 OM Aggregate Planning Quarter 1 Jan Feb Mar 150,000 120,000 110,000 Quarter 2 Apr May Jun 100,000 130,000 150,000 Quarter 3 Jul Aug Sep 180,000 150,000 140,000
- 6. 13 - 6 OM Aggregate Planning Combines appropriate resources into general terms Part of a larger production planning system Disaggregation breaks the plan down into greater detail Disaggregation results in a master production schedule
- 7. 13 - 7 OM Aggregate Planning Strategies options 1. Use inventories to absorb changes in demand 2. Accommodate changes by varying workforce size 3. Use part-timers, overtime, or idle time to absorb changes 4. Use subcontractors and maintain a stable workforce 5. Change prices or other factors to influence demand
- 8. 13 - 8 OM Capacity Options Changing inventory levels Increase inventory in low demand periods to meet high demand in the future Increases costs associated with storage, insurance, handling, obsolescence, and capital investment Shortages may mean lost sales due to long lead times and poor customer service
- 9. 13 - 9 OM Capacity Options Varying workforce size by hiring or layoffs Match production rate to demand Training and separation costs for hiring and laying off workers New workers may have lower productivity Laying off workers may lower morale and productivity
- 10. 13 - 10 OM Capacity Options Varying production rate through overtime or idle time Allows constant workforce May be difficult to meet large increases in demand Overtime can be costly and may drive down productivity Absorbing idle time may be difficult
- 11. 13 - 11 OM Capacity Options Subcontracting Temporary measure during periods of peak demand May be costly Assuring quality and timely delivery may be difficult Exposes your customers to a possible competitor
- 12. 13 - 12 OM Capacity Options Using part-time workers Useful for filling unskilled or low skilled positions, especially in services
- 13. 13 - 13 OM Demand Options Influencing demand Use advertising or promotion to increase demand in low periods Attempt to shift demand to slow periods May not be sufficient to balance demand and capacity
- 14. 13 - 14 OM Demand Options Back ordering during high- demand periods Requires customers to wait for an order without loss of goodwill or the order Most effective when there are few if any substitutes for the product or service Often results in lost sales
- 15. 13 - 15 OM Demand Options Counterseasonal product and service mixing Develop a product mix of counterseasonal items May lead to products or services outside the company’s areas of expertise
- 16. 13 - 16 OM Aggregate Planning in Services Controlling the cost of labor is critical 1. Accurate scheduling of labor-hours to assure quick response to customer demand 2. An on-call labor resource to cover unexpected demand 3. Flexibility of individual worker skills 4. Flexibility in rate of output or hours of work
- 17. 13 - 17 Costs of aggregate planning Reading assignment OM