This document discusses aggregate production planning (APP), which determines production quantities and schedules for the medium-term future of 3-18 months. APP balances long-term strategic planning with short-term production by considering available production capacity, demand forecasts, budgets, and other factors. It aims to minimize costs and maximize resource utilization through strategies like maintaining a steady production level, matching production to demand, or a hybrid approach. The outcomes of effective APP include reduced costs, improved capacity analysis, and a basis for more detailed production plans.

1. Production
Planning
techniques

2. Aggregate production planning
???
An organisation can finalise its Business Plans on the
basis of the demand forecasts. If once business plans
are ready then they can start over with the backward
working from the final sales unit to raw materials
required. Thus, quaterly plans are broken down into
labour, raw material, working capital etc..
This is the requirement for medium range of
period.( 6 to 18 months).
This process of working out on production
requirement for the medium ranges is called the
Aggregate Production Planning( APP).

3. It is one of the operational activity crucial to the
organisation as it looks to balance long term
strategic planning with short term production success.
The FACTORS that should be kept in mind before
starting an aggregate planning process :
A. A compelete information about the available
production facility and raw materials.
B. Organisation policy of labour management , quality
management..
C. Financial planning like the budgetary expenses..

4. Main inputs
For any planning technique to be at its success,
there needs to be some inputs. For aggregate
Planning, main inputs are :
1. An aggregate demand forecast for a relevant period.
2. Evaluating the all available means to manage
outsourcing, subcontracting etc...
3. Checking the existing operational status of workforce,
production effeciency etc..

5. Importance or role of APP
APP plays a significant role in acheiving the
objectives of the organisation:
1. Achieving financial goals by reducing overall variable
costs.
2. Maximising the utilization of overall production facility.
3. Provide customer delight by matching demand and
reducing wait time for customers.
4. Reduce investment in inventory stocking.
5. Able to meet scheduling goals, there by creating a happy
and satisfied worforce.

6. The following diagram depicts about the aggregate
planning process.
This comes under the production planning
environment whether be in external and internal.
The main objective of APP is to judge the company
policies and management inputs linked to operation,
accounts and finance, human resources to reduce
the price and increase revenue and enhance
customer satisfaction.

7. EXTERNAL
Production
planning
Demand
Economic
condition
External
capacity
Raw
material
Competiton
Production
Capacity
Workforce
Inventory
Internal

9. Advantages of APP
1. Cost reduction: It is concerned with determining the
quantity and the schedule of production for the immediate
future. These plans are intermediate plans for 3 to 18
months..
2. Analysis and strategy: Aggregate planning allow
planners to compare projected demand with existing
capacity. It helps in developing more accurate market
research.
3. Basis for production plans: Aggregate plans combine
resources into general categories and don't give a product
specific breakdown.

10. The Strategies !!!!
2 main pure strategies available for the planners
A level
strategy
A chase
strategy
Firm may choose to
utilize one of the pure
strategies in isolation or
they may go for opting
for a strategy that
combines the two...

11. Level Strategy
1. This seeks to produce an aggregate plan that maintains
steady production rate or steady employement level.
2. Firm maintains a level of workforce and steady rate of
output when demand is low.
3. This strategy allows a firm to maintain a constant level
of output and still meet demand.
4. It allows the firm to establish higher inventory level
than currently needed.

12. Chase Strategy
1. A chase strategy implies matching the demand and
capacity period by period .
2. It also signifies a great deal of flexibility on firm’s part.
3. The basic advantage of opting this strategy is that it
allows inventory to be held to the lowest posiible.
Most firms embracing the just in
time production concept utilize a
chase strategy approach to aggregate
planning.

13. Mixed / hybrid strategy
1. Commonly as the combination of the level and
chase strategy, Mixed strategy achieves to lower
the costs of the firm.
2. Build-up inventory ahead of rising demand and use
backorders to level extreme peaks.
3. Subcontract production or hire temporary workers to
cover short-term peaks.
4. Reassign workers to preventive maintenance..