Aggregate planning involves determining resource capacity over an intermediate time horizon to meet product demand. It aims to establish a company-wide plan for allocating resources through various demand management strategies, including adjusting capacity, production levels, workforce, and inventory. Quantitative techniques like linear programming can help optimize solutions by minimizing costs associated with hiring, firing, production and inventory carrying under demand constraints.
A small presentation of Demand Forecasting. It covers the Qualitative and Quantitative aspects of Demand Forecasting in Operations Management.
Related Document File: https://www.scribd.com/doc/311049068/Demand-Forecasting
Production Planning and Control
Objective of PPC
Classification/Functions of PPC
Levels of PPC
Factors determining Production Planning Procedures
Production Planning System
Factors Determining PC procedures
The Master Production Schedule (MPS) is a plan for the production of individual final items. The MPS breaks down the production plan to show, in each period, the quantity to produce of each final article.
#masterproduction #mps #mrp #erp #manufacturing #manufacturingsoftware #erpsoftware #mrpeasy
Role of production planning and control in operation managementRiya Sunny
Planning and Control are very important for success of an operation unit. For effective operation in a manufacturing unit, it is essential to integrate the production ...
A small presentation of Demand Forecasting. It covers the Qualitative and Quantitative aspects of Demand Forecasting in Operations Management.
Related Document File: https://www.scribd.com/doc/311049068/Demand-Forecasting
Production Planning and Control
Objective of PPC
Classification/Functions of PPC
Levels of PPC
Factors determining Production Planning Procedures
Production Planning System
Factors Determining PC procedures
The Master Production Schedule (MPS) is a plan for the production of individual final items. The MPS breaks down the production plan to show, in each period, the quantity to produce of each final article.
#masterproduction #mps #mrp #erp #manufacturing #manufacturingsoftware #erpsoftware #mrpeasy
Role of production planning and control in operation managementRiya Sunny
Planning and Control are very important for success of an operation unit. For effective operation in a manufacturing unit, it is essential to integrate the production ...
9. Pure Strategies Hiring cost = $100 per worker Firing cost = $500 per worker Regular production cost per pound = $2.00 Inventory carrying cost = $0.50 pound per quarter Production per employee = 1,000 pounds per quarter Beginning work force = 100 workers Example: QUARTER SALES FORECAST (LB) Spring 80,000 Summer 50,000 Fall 120,000 Winter 150,000
10. Level Production Strategy Level production = 100,000 pounds (50,000 + 120,000 + 150,000 + 80,000) 4 Spring 80,000 100,000 20,000 Summer 50,000 100,000 70,000 Fall 120,000 100,000 50,000 Winter 150,000 100,000 0 400,000 140,000 Cost of Level Production Strategy (400,000 X $2.00) + (140,00 X $.50) = $870,000 SALES PRODUCTION QUARTER FORECAST PLAN INVENTORY
11. Chase Demand Strategy Spring 80,000 80,000 80 0 20 Summer 50,000 50,000 50 0 30 Fall 120,000 120,000 120 70 0 Winter 150,000 150,000 150 30 0 100 50 SALES PRODUCTION WORKERS WORKERS WORKERS QUARTER FORECAST PLAN NEEDED HIRED FIRED Cost of Chase Demand Strategy (400,000 X $2.00) + (100 x $100) + (50 x $500) = $835,000
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14. LP MODEL Minimize Z = $100 ( H 1 + H 2 + H 3 + H 4 ) + $500 ( F 1 + F 2 + F 3 + F 4 ) + $0.50 ( I 1 + I 2 + I 3 + I 4 ) Subject to P 1 - I 1 = 80,000 (1) Demand I 1 + P 2 - I 2 = 50,000 (2) constraints I 2 + P 3 - I 3 = 120,000 (3) I 3 + P 4 - I 4 = 150,000 (4) Production 1000 W 1 = P 1 (5) constraints 1000 W 2 = P 2 (6) 1000 W 3 = P 3 (7) 1000 W 4 = P 4 (8) 100 + H 1 - F 1 = W 1 (9) Work force W 1 + H 2 - F 2 = W 2 (10) constraints W 2 + H 3 - F 3 = W 3 (11) W 3 + H 4 - F 4 = W 4 (12)
15. Transportation Method 1 900 1000 100 500 2 1500 1200 150 500 3 1600 1300 200 500 4 3000 1300 200 500 Regular production cost per unit $20 Overtime production cost per unit $25 Subcontracting cost per unit $28 Inventory holding cost per unit per period $3 Beginning inventory 300 units EXPECTED REGULAR OVERTIME SUBCONTRACT QUARTER DEMAND CAPACITY CAPACITY CAPACITY
17. Burruss’ Production Plan 1 900 1000 100 0 500 2 1500 1200 150 250 600 3 1600 1300 200 500 1000 4 3000 1300 200 500 0 Total 7000 4800 650 1250 2100 REGULAR SUB- ENDING PERIOD DEMAND PRODUCTION OVERTIME CONTRACT INVENTORY
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19. Hierarchical Nature of Planning Items Product lines or families Individual products Components Manufacturing operations Resource Level Plants Individual machines Critical work centers Production Planning Capacity Planning Resource requirements plan Rough-cut capacity plan Capacity requirements plan Input/ output control Aggregate production plan Master production schedule Material requirements plan Shop floor schedule All work centers
23. ATP: Example (cont.) ATP in April = (10+100) – 70 = 40 ATP in May = 100 – 110 = -10 ATP in June = 100 – 50 = 50 Take excess units from April = 30 = 0
24. Rule Based ATP Product Request Is the product available at this location? Is an alternative product available at an alternate location? Is an alternative product available at this location? Is this product available at a different location? Available-to-promise Allocate inventory Capable-to-promise date Is the customer willing to wait for the product? Available-to-promise Allocate inventory Revise master schedule Trigger production Lose sale Yes No Yes No Yes No Yes No Yes No
28. Yield Management: Example Hotel should be overbooked by two rooms NO-SHOWS PROBABILITY P ( N < X ) 0 .15 .00 1 .25 .15 2 .30 .40 3 .30 .70 Optimal probability of no-shows P( n < x ) = = .517 C u C u + C o 75 75 + 70 .517