Production Planning. Dr. Everette S. Gardner, Jr. Aggregate planning. Definition Choosing production rates, work force levels, and inventory levels Horizon 6-18 months into future Prerequisites Forecasting Company policies on Max./min. inventories Hiring/firing Overtime.
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Dr. Everette S. Gardner, Jr.
Choosing production rates, work force levels, and inventory levels
6-18 months into future
Are work force and inventories maintained at a level sufficient to meet unexpected demand?
Improves quality, productivity, union relations
Makes materials planning easier, reduces uncertainty in physical distribution
Will overtime reduce quality? When will physical capacity (space, machinery, equipment) become inadequate?
Have lead time and stock availability goals been met?
Balancing service capacity with demand
Nbr. of workers
Full vs. part-time
Production – Inventory System
Days for transit time
Days to process or to
handle and issue orders
25 Day De- 5 Day Delay 25 Day Delay 13 Day Delay
lay to sense to sensefor Review for Review
needs, place needs, place and and
and transmit and transmit Transmission Transmission
orders M.O.s of orders of orders
Raw Factory Factory Distributor Retail Ultimate
Material Warehouse Inventory Inventory Customer
50 Independent 500 Independent
Company System Under
Retail inventory (units)
Factory production output (units/week)
Distributor inventory (units)
Retail sales RRR
Factory warehouse inventory