Aggregate planning
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Aggregate planning is an operational activity that develops a preliminary production schedule 6-18 months in advance to minimize total costs. It forecasts sales, production levels, inventory, and backlogs. The objectives are to maximize customer service, minimize inventory investment and production changes, and maximize equipment utilization. Factors like available capacity, demand, and corporate policies must be considered. Common strategies are level plans, which keep production even, and chase plans, which match it to demand. The aggregate plan must then be broken down into specific production requirements.
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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.
Production planning hierarchy
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A presentation on aggregate planning
Aggregate planning is an intermediate planning method used to determine necessary resource capacity to meet expected demand over 2-18 months. The objectives are to minimize costs and maximize profits, inventory investment, and plant utilization while minimizing changes in workforce and production rates. Approaches include chase, which adjusts capacity to match demand, and level, which keeps capacity constant and uses inventory to absorb demand fluctuations. Common techniques are graphical/charting methods, linear programming, and simulation.
Total Cost Management
Total Cost Management (TCM) is a systematic approach to understand all costs of an organization to control, reduce, and eliminate costs. It uses tools like activity-based costing and target costing. TCM follows the PDCA (plan-do-check-act) cycle throughout a project's life cycle from ideation to termination. The PDCA cycle involves planning activities, executing them, measuring performance, and taking actions to improve performance. TCM was developed by AACE International, a nonprofit association for cost engineering professionals, to integrate cost management into project portfolio, program, and project management.
Aggregate planning
Aggregate planning involves developing a preliminary production schedule over the next 6-18 months to satisfy forecasted demand at minimum cost. It considers targeted sales, production levels, inventory levels and backlogs. The objectives are to minimize costs and changes while maximizing profits, customer service and resource utilization. Common strategies are level, which maintains steady output/employment, or chase, which matches demand period to period. Techniques to develop plans include linear programming, linear decision rules and simulation models.
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This document discusses integrated materials management. It covers the key components of materials management including planning, sourcing, purchasing, moving, storing and controlling materials. The objectives of materials management are outlined as material selection, operating cost, consistent quality, continuity of supply, low cost of possession, high inventory turnover, vendor relations, standardization, and scientific systems and records. The integrated approach to materials management includes inventory control, purchasing, stores management, and materials planning and control. Various aspects of inventory control, purchasing systems, stores management functions, and materials planning and control functions are described.
Distribution network desing
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Capacity planning
1. Capacity planning involves estimating current capacity, forecasting future capacity needs, identifying options to meet needs, and selecting sources of additional capacity.
2. Capacity can be measured using output rate, input rate, capacity utilization percentage, or capacity cushion and is important for meeting demands, costs, competitiveness, and planning.
3. The document discusses definitions of capacity, the capacity planning process, measurements of capacity, forecasting demands, and considerations for evaluating capacity alternatives.
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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.
Production planning hierarchy
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Total Cost Management
Total Cost Management (TCM) is a systematic approach to understand all costs of an organization to control, reduce, and eliminate costs. It uses tools like activity-based costing and target costing. TCM follows the PDCA (plan-do-check-act) cycle throughout a project's life cycle from ideation to termination. The PDCA cycle involves planning activities, executing them, measuring performance, and taking actions to improve performance. TCM was developed by AACE International, a nonprofit association for cost engineering professionals, to integrate cost management into project portfolio, program, and project management.
Aggregate planning
Aggregate planning involves developing a preliminary production schedule over the next 6-18 months to satisfy forecasted demand at minimum cost. It considers targeted sales, production levels, inventory levels and backlogs. The objectives are to minimize costs and changes while maximizing profits, customer service and resource utilization. Common strategies are level, which maintains steady output/employment, or chase, which matches demand period to period. Techniques to develop plans include linear programming, linear decision rules and simulation models.
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This document discusses integrated materials management. It covers the key components of materials management including planning, sourcing, purchasing, moving, storing and controlling materials. The objectives of materials management are outlined as material selection, operating cost, consistent quality, continuity of supply, low cost of possession, high inventory turnover, vendor relations, standardization, and scientific systems and records. The integrated approach to materials management includes inventory control, purchasing, stores management, and materials planning and control. Various aspects of inventory control, purchasing systems, stores management functions, and materials planning and control functions are described.
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Capacity planning
1. Capacity planning involves estimating current capacity, forecasting future capacity needs, identifying options to meet needs, and selecting sources of additional capacity.
2. Capacity can be measured using output rate, input rate, capacity utilization percentage, or capacity cushion and is important for meeting demands, costs, competitiveness, and planning.
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Aggregate planning is intermediate-range production and capacity planning that covers 6 to 18 months. It matches market demand to company resources by developing a strategy to economically meet demand through establishing production rates and workforce levels. Aggregate planning uses composite products to simplify calculations and considers trade-offs between inventory levels and short-term capacity. It can take proactive or reactive approaches to coordinate marketing and production plans.
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Aggregate planning determines production levels and resource needs over the next 6-18 months. It aims to minimize total costs by setting optimal levels of production, inventory, workforce, overtime, and subcontracting. The aggregate planner considers demand forecasts, production costs, capacity constraints, and inventory and backlog costs to determine the best strategy of chasing demand, maintaining flexibility, or leveling production.
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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.
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For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/DistMang
Join us on Facebook: http://www.facebook.com/welearnindia
Follow us on Twitter: https://twitter.com/WeLearnIndia
Read our latest blog at: http://welearnindia.wordpress.com
Subscribe to our Slideshare Channel: http://www.slideshare.net/welingkarDLPOperation scheduling
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Aggregate planning determines production levels and resource needs over the next 6-18 months. It aims to minimize total costs by setting optimal levels of production, inventory, workforce, overtime, and subcontracting. The aggregate planner considers demand forecasts, production costs, capacity constraints, and inventory and backlog costs to determine the best strategy of chasing demand, maintaining flexibility, or leveling production.
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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.
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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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Aggregate planning
Aggregate planning involves marketing activities to plan production over 6-18 months in advance. It aims to minimize costs and inventory investment while maximizing customer service and profits. There are three main types of aggregate plans: level plans maintain constant workforce and capacity to meet average demand but can build inventory; chase plans produce only what is needed each period to minimize inventory but involve constantly changing capacity; and hybrid plans combine options like a level workforce with overtime to balance these tradeoffs.
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2) The S&OP relates to other plans like the business plan and considers inputs from functions areas and managers. It aims to minimize costs while meeting objectives like customer service and plant utilization.
3) The document describes S&OP strategies, constraints, tools, and uses a transportation example to illustrate finding the lowest cost production plan to meet seasonal demand for a paint company.
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STRATEGIC PLANNING
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EFFECTIVENESS OF STRATEGIC PLANNING
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The document discusses the sales planning and forecasting process for companies. It describes how most companies rely on spreadsheets for this process, which leads to issues like low forecast accuracy, lack of consensus between teams, and disconnects between sales projections and operational planning. The document then presents the Cognos Sales Planning and Forecasting Blueprint as a solution that integrates the process and allows sales projections to be captured closer to customers for improved accuracy, while synchronizing financial and operations plans. It provides an example of how the blueprint supports the sales planning process and highlights its benefits based on the experience of a company that implemented it.
Pom agg plan
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.
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Production planning techniques- aggregate planning
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Aggregate planning
- 2. MEANING Aggregate planning is an operational activity that does an aggregate planning for the production process, in advance to 6 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 the total cost of the organization is kept to the minimum over the period. Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization.The aggregate plan generally contains targeted sales forecasts, production levels, inventory levels, and customer backlogs.
- 3. OBJECTIVES Maximize customer service Minimize inventory investment Minimize changes in production rates Maximize utilization of plant & equipments
- 4. IMPORTANCE
- 7. Steps in Aggregate Planning Test the plan for robustness Select the plan that best meet the corporate objective Develop contingency plans to account for surges and downturns in the market Determine the product cost Identify corporate policies and external constraints Determine the available capacity Determine demand for each time period
- 9. LEVEL PLAN
- 10. CHASE PLAN
- 11. CONCLUSION So, in order to translate an Aggregate Plan into meaningful terms of production, it must be dis- Aggregated (i.e, broken down into specific product requirements ) to determine labour, material and inventory requirements.