Aggregate Planning

Aggregate Planning

Aggregate Planning

A process used by companies to manage the overall capacity and demand for their products or services over a specific period.

What does aggregate planning involve?

Making decisions regarding production levels, workforce, inventory levels and other resources to meet the expected demand while optimizing costs and efficiency.

Aggregate planning is a plan that includes

forecast levels for groups of finished goods, inventory, shortages, and changes in workforceto optimize production and meet demand.

The objective of Aggregate Planning is to

meet forecast demand while minimizing costs over the planning period

Aggregate planning combines what?

Appropriate resources into general terms

Aggregate Planning is part of a,.

larger production planning system

Aggregate Planning is a disaggregation that breaks

The plan down into greater detail

Aggregate planning is a disaggregation results in a

master production schedule

Should inventories be used to absorb changes in demand?

Sometimes you dont need a huge inventory such as restaurants do not need bulks of veggies, etc.

Should subcontractors be used and maintain a stable workforce?

Using subcontractors can help manage fluctuations in demand while keeping a core workforce stable.

Should prices or other factors be changed to influence demand?

Adjusting prices or promotional strategies can help influence consumer demand, ensuring better alignment with production capacity or competitiveness in the market

Changing inventory levels (option 1)

Increase inventory during low demand period to meet high demand period

Varying workforce size by hiring or layoffs

hire/layoff workers to match production rates

varying production rates through overtime or idle time

keep constant workforce while varying workhours

sub-contracting

get more human resource from subcontracting

using part-time workers

get part time workers

Leve Schedule

Production Rate, Output rate, workforce level is constant

Chase Strategy

Production = Demand

Graphical Method

A technique used in aggregate planning to visually represent production schedules and capacity constraints, allowing managers to optimize resource allocation.