ch13(aggregate planning)

8/18/2019 Ch13(Aggregate Planning)

1/18

©The McGraw-Hill Companies, Inc.,

1


2/18


2

Chapter 13

Aggregate Planning


3/18


3

• Sales and Operations Planning

• The Aggregate Operations Plan

• Examples: Chase and Level strategies

OBJECTIVES


4/18


4

Master scheduling

Material requirements planning

Order scheduling

Weekly workforce and

customer scheduling

aily workforce and customer scheduling

!rocess planning

"trategic capacity planning

"ales and operations #aggregate$ planning

%ong

range

&ntermediate

range

"hort

range

Manufacturing "er'ices

()hi*it 13+1

()hi*it 13+1

"ales plan ,ggregate operations plan

-orecasting

. demand

management


5/18


/

Sales and Operations Planning Activities

• Longrange planning 0 !reater than one "ear planning hori#on

0 $s%all" per&ormed in ann%al increments

• 'edi%mrange planning 0 Six to eighteen months

0 $s%all" (ith monthl" or )%arterl" increments

• Shortrange planning 0 One da" to less than six months

0 $s%all" (ith (ee*l" increments


6/18


The Aggregate Operations Plan

• 'ain p%rpose: Speci&" the optimal com+ination o& 0 prod%ction rate ,%nits completed per %nit o& time-

0 (or*&orce level ,n%m+er o& (or*ers-

0 inventor" on hand ,inventor" carried &romprevio%s period-

• Prod%ct gro%p or +road categor" ,Aggregation-

• This planning is done over an intermediaterange

planning period o& . to/0 months


7/18©The McGraw-Hill Companies, Inc.,

Balancing Aggregate 1emand

and Aggregate Prod%ction Capacit"

2

4

1

5an -e* Mar ,pr May 5un

4///

1

2

4

1

5an -e* Mar ,pr May 5un

4/ 4

6

4

Suppose the figure tothe right representsforecast demand inunits

Suppose the figure tothe right representsforecast demand inunits

Now suppose thislower figure representsthe aggregate capacityof the company tomeet demand

Now suppose thislower figure representsthe aggregate capacityof the company tomeet demand

What we want to do isbalance out theproduction rate,workforce levels, andinventory to makethese figures match up

What we want to do isbalance out theproduction rate,workforce levels, andinventory to makethese figures match up



2e)%ired Inp%ts to the Prod%ction

Planning S"stem

Planning&or

prod%ction

External

capacit"

Competitors3+ehavior

2a( materialavaila+ilit"

'ar*etdemand

Economic

conditions

C%rrent

ph"sical

capacit"

C%rrent

(or*&orce

Inventor"

levels

Activities

re)%ired

&or

prod%ction

External

to &irm

Internal

to &irm



6

4e" Strategies &or 'eeting 1emand

• Chase

• Level

• Some com+ination o& the t(o



1

Aggregate Planning Examples: $nit

1emand and Cost 1ata

Materials 7/8unit9olding costs 718unit per mo+

Marginal cost of stockout 71+2/8unit per mo+

9iring and training cost 728worker

%ayoff costs 72/8worker

%a*or hours required +1/ hrs8unit"traight time la*or cost 78hour

:eginning in'entory 2/ units

!roducti'e hours8worker8day +2/

!aid straight hrs8day

Suppose we have the following unitdemand and cost information:

Suppose we have the following unit

demand and cost information:

emand8mo 5an -e* Mar ,pr May 5un

4/ // 1



11

Jan Feb Mar Apr May JunDays/mo 22 19 21 21 22 20

Hrs/worker/mo 159.5 137.75 152.25 152.25 159.5 145

Un!s/worker 10"3.33 91#.33 1015 1015 10"3.33 9""."7

$/worker $1%40# 1%21" 1%344 1%344 1%40# 1%2#0

!roducti'e hours8worker8day +2/

!aid straight hrs8day

emand8mo 5an -e* Mar ,pr May

5un

4/ // 1

Given the demand and cost information below, whatare the aggregate hours/worker/month, units/worker, anddollars/worker?

Given the demand and cost information below, whatare the aggregate hours/worker/month, units/worker, anddollars/worker?

+2/)2

2

+2/)+1/;4+33

.

4+33)22;13+3322)hrs)7;714

C%tandTr" Example: 1etermining

Straight La+or Costs and O%tp%t



12

Chase Strateg"

,5iring 6 7iring to meet demand-

Jan

Days/mo 22

Hrs/worker/mo 159.5

Un!s/worker 1%0"3.33

$/worker $1%40#

Jan

Deman& 4%500

'e(. n*. 250

+e! re,. 4%250-e,. workers 3.997

Hre&

Fre& 3

orkore 4

n&n( n*en!ory 0

ets assume our current workforce is !workers"

ets assume our current workforce is !workers"

#irst, calculate net re$uirements forproduction, or %&''()&'*%)&' units

+hen, calculate number of workersneeded to produce the netre$uirements, or%)&'/'-."..*."! or % workers

#inally, determine the number ofworkers to hire/fire" 0n this case weonly need % workers, we have !, so. can be fired"



13

Jan Feb Mar Apr May JunDays/mo 22 19 21 21 22 20

Hrs/worker/mo 159.5 137.75 152.25 152.25 159.5 145

Un!s/worker 1%0"3 91# 1%015 1%015 1%0"3 9"7

$/worker $1%40# 1%21" 1%344 1%344 1%40# 1%2#0

Jan Feb Mar Apr May Jun

Deman& 4%500 5%500 7%000 10%000 #%000 "%000

'e(. n*. 250

+e! re,. 4%250 5%500 7%000 10%000 #%000 "%000-e,. workers 3.997 5.9#9 ".#97 9.#52 7.524 ".207

Hre& 2 1 3

Fre& 3 2 1

orkore 4 " 7 10 # 7

n&n( n*en!ory 0 0 0 0 0 0

1elow are the complete calculations for the remainingmonths in the si2 month planning hori3on




14

J an Feb Mar Apr May Jun

Deman& 4%500 5%500 7%000 10%000 #%000 "%000'e(. n*. 250

+e! re,. 4%250 5%500 7%000 10%000 #%000 "%000

-e,. workers 3.997 5.9#9 ".#97 9.#52 7.524 ".207

Hre& 2 1 3

Fre& 3 2 1orkore 4 " 7 10 # 7

n&n( n*en!ory 0 0 0 0 0 0

Jan Feb Mar Apr May Jun os!s

Ma!era $21%250.00 $27%500.00 $35%000.00 $50%000.00 $40%000.00 $30%000.00 203%750.00

abor 5%"27.59 7%2#2.7" 9%2"#.97 13%241.3# 10%593.10 7%944.#3 53%95#."2

Hrn( os! 400.00 200.00 "00.00 1%200.00

Frn( os! 750.00 500.00 250.00 1%500.00

4)-',%'5"-)

1elow are the complete calculations for the remaining months inthe si2 month planning hori3on with the other costs included

1



1/

Level 8or*&orce Strateg" ,S%rpl%s and

Shortage Allo(ed-

Jan

Deman& 4%500

'e(. n*. 250

+e! re,. 4%250

orkers "

ro&u!on "%3#0n&n( n*en!ory 2%130

6urpus 2%130

6or!a(e

ets take the same problem asbefore but this time use theevel Workforce strategy

ets take the same problem asbefore but this time use theevel Workforce strategy

+his time we will seek to usea workforce level of - workers+his time we will seek to usea workforce level of - workers

1



1


Demand 4,500 5,500 7,000 10,000 8,000 6,000

Beg. inv. 250 2,130 2,140 1,230 2,680 1,300

!e" re#. 4,250 3,370 4,860 8,770 10,680 7,300

$%r&er' 6 6 6 6 6 6

(r%du)"i%n 6,380 5,510 6,0*0 6,0*0 6,380 5,800

+nding inven"%r 2,130 2,140 1,230 2,680 1,300 1,500

urp-u' 2,130 2,140 1,230

%r"age 2,680 1,300 1,500

!%"e, i/ 0e re)a-)u-a"e ".i' '.ee" 0i". 7 0%r&er'

0e 0%u-d .ave a 'urp-u'

!%"e, i/ 0e re)a-)u-a"e ".i' '.ee" 0i". 7 0%r&er'

0e 0%u-d .ave a 'urp-u'



1



1


4,500 5,500 7,000 10,000 8,000 6,000

250 2,130 10 *10 3,*10 1,620

4,250 3,370 4,860 8,770 10,680 7,300

6 6 6 6 6 6

6,380 5,510 6,0*0 6,0*0 6,380 5,800

2,130 2,140 1,230 2,680 1,300 1,500

2,130 2,140 1,230

2,680 1,300 1,500


8,448 7,2*6 8,064 8,064 8,448 7,680 48,000.00

31,*00 27,550 30,450 30,450 31,*00 2*,000 181,250.00

2,130 2,140 1,230 5,500.00

3,350 1,625 1,875 6,850.00

4)%,-''"''

Belo( are the complete calc%lations &or the

remaining months in the six month planning

hori#on (ith the other costs incl%ded

Belo( are the complete calc%lations &or the

remaining months in the six month planning

hori#on (ith the other costs incl%ded

Note, totalcosts underthis strategyare less than6hase at4)-'"%'5"-)

Note, totalcosts underthis strategy

are less than6hase at4)-'"%'5"-)

2ab%r

Ma"eria-

"%rage

"%)&%u"

1

ch13(aggregate planning)

Documents