Operations Management

Chapter 7 : Aggregate Planning

Overview of Planning Activities
business planning
operational planning- The aggregate planning process
Concept of Aggregation
Aggregate Planning Goals
Forecasts of Aggregate Demand
Inter Relationships Among Decisions
Strategies for Aggregate Planning
Pure Planning Strategies-Aggregate planning Techniques
Graphical Method for Aggregate Output Planning
Optimal Models for Aggregate Planning
Heuristic models
Computer search models
computer simulation in capacity evaluation
Master production Schedule
master production scheduling
Master schedule formation
Implementing aggregate plans and master schedules
Unplanned events
Behavioral considerations-Capacity planning

Chapter Summary

Proper aggregate planning is the key to an organization's performance. An aggregate plan defines a company's production rates, workforce levels and inventory postition with respect to market demand and available capacity. Aggregate planning balances market demand and the production rate of the organization.

This enables the organizations to reduce costs, and helps in optimizing the utilization of available resources. Proper implementation of the aggregate plan enables an organization to use all available resources to the fullest extent without overloading the production system.

The success of an organization is to a large extent dependent on the way potentially productive resources such as equipment and people are utilized over a period of time. Aggregate plans can be developed using the graphical method, linear programming, linear decision rules (LDR's), and heuristic models such as the management coefficients model, and the computer search method.

Capacity planning is an important aspect of aggregate planning. Capacity defines the maximum output possible from a system or a process. Master production scheduling process disaggregates the aggregate plans into individual products and generates a production schedule keeping in view the capacity requirements and capacity availability, raw material requirements and availability, etc.

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