Chap012 - Aggregate Planning
-
Upload
spchheda4996 -
Category
Documents
-
view
230 -
download
0
Transcript of Chap012 - Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
1/29
S P CHHEDA & CO
12-1 Aggregate Planning
William J. Stevenson
Operations Management
8th edition
-
8/9/2019 Chap012 - Aggregate Planning
2/29
S P CHHEDA & CO
12-2 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
3/29
S P CHHEDA & CO
12-3 Aggregate Planning
Planning Horizon
Aggregate planning: Intermediate-rangecapacity planning, usually covering 2 to 12
months.
Short
range
Intermediate
range
Long range
Now 2 months 1 Year
-
8/9/2019 Chap012 - Aggregate Planning
4/29
S P CHHEDA & CO
12-4 Aggregate Planning
Short-range plans (Detailed plans) Machine loading
Job assignments
Intermediate plans (General levels) Employment
Output
Long-range plans Long term capacity
Location / layout
Overview of Planning Levels
-
8/9/2019 Chap012 - Aggregate Planning
5/29
S P CHHEDA & CO
12-5 Aggregate Planning
Planning Sequence
Business PlanEstablishes operations
and capacity strategies
Establishes operations
and capacity strategies
Aggregate plan
Establishes
operations capacity
Establishes
operations capacity
Master schedule Establishes schedules
for specific products
Establishes schedules
for specific products
Corporate
strategies
and policies
Economic,
competitive,
and political
conditions
Aggregate
demand
forecasts
Figure 12.1
-
8/9/2019 Chap012 - Aggregate Planning
6/29
S P CHHEDA & CO
12-6 Aggregate Planning
Resources Workforce
Facilities
Demand forecast
Policies Subcontracting
Overtime
Inventory levels
Back orders
Costs Inventory carrying
Back orders
Hiring/firing
Overtime
Inventory changes
subcontracting
Aggregate Planning Inputs
-
8/9/2019 Chap012 - Aggregate Planning
7/29
S P CHHEDA & CO
12-7 Aggregate Planning
Total cost of a plan
Projected levels of inventory
Inventory Output
Employment
Subcontracting
Backordering
Aggregate Planning Outputs
-
8/9/2019 Chap012 - Aggregate Planning
8/29
S P CHHEDA & CO
12-8 Aggregate Planning
Aggregate PlanningStrategies
Proactive Alter demand to match capacity
Reactive
Alter capacity to match demand Mixed
Some of each
-
8/9/2019 Chap012 - Aggregate Planning
9/29
S P CHHEDA & CO
12-9 Aggregate Planning
Pricing
Promotion
Back orders
New demand
Demand Options
-
8/9/2019 Chap012 - Aggregate Planning
10/29
S P CHHEDA & CO
12-10 Aggregate Planning
Hire and layoff workers Overtime/slack time
Part-time workers
Inventories Subcontracting
Capacity Options
lA t Pl i
-
8/9/2019 Chap012 - Aggregate Planning
11/29
S P CHHEDA & CO
12-11 Aggregate PlanningAggregate PlanningStrategies
Maintain a level workforce
Maintain a steady output rate
Match demand period by period
Use a combination of decision
variables
12 12 A Pl
-
8/9/2019 Chap012 - Aggregate Planning
12/29
S P CHHEDA & CO
12-12 Aggregate Planning
Basic Strategies
Level capacity strategy:
Maintaining a steady rate of regular-time outputwhile meeting variations in demand by a
combination of options.
Chase demand strategy:
Matching capacity to demand; the planned
output for a period is set at the expecteddemand for that period.
12 13 A Pl i
-
8/9/2019 Chap012 - Aggregate Planning
13/29
S P CHHEDA & CO
12-13 Aggregate Planning
Chase Approach
Advantages Investment in inventory is low
Labor utilization in high
Disadvantages
The cost of adjusting output rates and/or
workforce levels
12 14 A t Pl i
-
8/9/2019 Chap012 - Aggregate Planning
14/29
S P CHHEDA & CO
12-14 Aggregate Planning
Level Approach
Advantages Stable output rates and workforce
Disadvantages
Greater inventory costs
Increased overtime and idle time
Resource utilizations vary over time
12 15 A t Pl iT h i f A t
-
8/9/2019 Chap012 - Aggregate Planning
15/29
S P CHHEDA & CO
12-15 Aggregate Planning
1. Determine demand for each period2. Determine capacities for each period
3. Identify policies that are pertinent
4. Determine units costs
5. Develop alternative plans and costs
6. Select the best plan that satisfies objectives.
Otherwise return to step 5.
Techniques for AggregatePlanning
12 16 A t Pl i
-
8/9/2019 Chap012 - Aggregate Planning
16/29
S P CHHEDA & CO
12-16 Aggregate Planning
Cumulative Graph
1 2 3 4 5 6 7 8 9 10
Cumulative
production
Cumulative
demandC
umula
tiveoutput/d
emand
Figure 12.3
12 17 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
17/29
S P CHHEDA & CO
12-17 Aggregate Planning
Average Inventory
Average
inventory
Beginning Inventory + Ending Inventory
2=
12 18 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
18/29
S P CHHEDA & CO
12-18 Aggregate Planning
Mathematical Techniques
Linear programming: Methods for obtainingoptimal solutions to problems involvingallocation of scarce resources in terms of cost
minimization.Linear decision rule: Optimizing technique that
seeks to minimize combined costs, using aset of cost-approximating functions to obtain a
single quadratic equation.
12 19 Aggregate PlanningSummar of Planning
-
8/9/2019 Chap012 - Aggregate Planning
19/29
S P CHHEDA & CO
12-19 Aggregate PlanningSummary of PlanningTechniques
Technique Solution Characteristics
Graphical/chartingTrial and
error
Intuitively appealing, easy to
understand; solution not
necessarily optimal.
Linearprogramming
Optim izing Com puterized; linear assum ptions not always valid.
Linear
dec ision rule
Op tim izing C om plex, req uires co nsid era ble
effort to obtain pertinent cost
information and to construct
model; cost assumptions notalwa ys valid.
Sim ulation Trial and
error
Com puterized m odels can be
exam ined under a variety of
conditions.
Table 12.7
12 20 Aggregate PlanningAggregate Planning in
-
8/9/2019 Chap012 - Aggregate Planning
20/29
S P CHHEDA & CO
12-20 Aggregate Planning
Services occur when they are rendered
Demand for service can be difficult to
predict Capacity availability can be difficult to
predict
Labor flexibility can be an advantage in
services
Aggregate Planning inServices
12 21 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
21/29
S P CHHEDA & CO
12-21 Aggregate Planning
Aggregate Plan to MasterSchedule
Aggregate
Planning
Disaggregation
Master
Schedule
Figure 12.4
12-22 Aggregate PlanningDisaggregating the
-
8/9/2019 Chap012 - Aggregate Planning
22/29
S P CHHEDA & CO
12-22 Aggregate Planning
Master schedule: The result ofdisaggregating an aggregate plan; shows
quantity and timing of specific end items for
a scheduled horizon.
Rough-cut capacity planning: Approximate
balancing of capacity and demand to test
the feasibility of a master schedule.
Disaggregating theAggregate Plan
12-23 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
23/29
S P CHHEDA & CO
12 23 Aggregate Planning
Master Scheduling
Master schedule Determines quantities needed to meet demand
Interfaces with Marketing
Capacity planning
Production planning
Distribution planning
12-24 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
24/29
S P CHHEDA & CO
12 24 Aggregate Planning
Master Scheduler
Evaluates impact of new orders Provides delivery dates for orders
Deals with problems
Production delays Revising master schedule
Insufficient capacity
12-25 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
25/29
S P CHHEDA & CO
12 25 Aggregate Planning
Master Scheduling Process
MasterScheduling
Beginning inventory
Forecast
Customer orders
Inputs Outputs
Projected inventory
Master production schedule
Uncommitted inventory
Figure 12.6
12-26 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
26/29
S P CHHEDA & CO
12 26 Aggregate Planning
Projected On-hand Inventory
Projected on-hand
inventory
Inventory from
previous week
Current weeks
requirements-=
12-27 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
27/29
S P CHHEDA & CO
12 27 Aggregate Planning
Projected On-hand InventoryProjected On-hand Inventory
64 1 2 3 4 5 6 7 8
Forecast 30 30 30 30 40 40 40 40
Customer Orders
(committed) 33 20 10 4 2
Projected on-hand
inventory 31 1 -29
JUNE JULY
BeginningInventory
Customer orders are
larger than forecast in
week 1
Forecast is larger than
Customer orders in week 2
Forecast is larger than
Customer orders in week 3
Figure 12.8
12-28 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
28/29
S P CHHEDA & CO
gg g g
Time Fences in MPSTime Fences in MPS
Period
frozen
(firm or
fixed)
slushy
somewhat
firm
liquid
(open)
Figure 12.12
1 2 3 4 5 6 7 8 9
12-29 Aggregate Planning
-
8/9/2019 Chap012 - Aggregate Planning
29/29
S P CHHEDA & CO
gg g g
Solved Problems: Problem 1Solved Problems: Problem 1