Aggregate Planning Today

Aggregate Planning Today

1. medium-range capacity planning

   • Time horizon: 3 to 18 months
   • Goal: Achieve a production plan to satisfy demand
     • Appropiate resource input and output levels
     • Influencing demand and supply
   • Basis to budget development

2. Principal Characteristics

   • 12 months of time horizon
     • Updating of the plan periodically
   • Demand is assumed to be fluctuating, uncertain or seasonal
   • Possibility of changing demand and supply variables
   • it may achueve low inventories, good labor relations, low costs, flexibility and good customer services
   • Facilities are considered fixed

3. Decision options

   • Two types
     • Modifying demand
       • Pricing
       • Advertising and production
       • Backlog or reservation
       • Development of complementary products
     • Modifying supply
       • Hiring and layoff of employees
       • Overtime and undertime
       • Using Part-time/temporary labour
       • carrying inventory
       • subcontracting
       • making operative arrangements