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PROD 2800 PRODUCTION AND OPERATIONS MANAGEMENT Gestion de la production et des opérations

PROD 2800 PRODUCTION AND OPERATIONS MANAGEMENT Gestion de la production et des opérations. Per AGRELL agrell@poms.ucl.ac.be Lecture 3 Aggregate planning. Outline. Hierarchical production planning Aggregate production planning Models Approaches Yield management.

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PROD 2800 PRODUCTION AND OPERATIONS MANAGEMENT Gestion de la production et des opérations

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  1. PROD 2800PRODUCTION AND OPERATIONS MANAGEMENTGestion de la production et des opérations Per AGRELL agrell@poms.ucl.ac.be Lecture 3 Aggregate planning

  2. Outline • Hierarchical production planning • Aggregate production planning • Models • Approaches • Yield management PROD 2800

  3. Product structure framework PROD 2800

  4. Customer order point PROD 2800

  5. Production planning • Planning problem • Uncertainty • Dimensionality • How to make a consistent production planning system over multiple time horizons in a complex, uncertain world? PROD 2800

  6. Hierarchical production planning • Defined decision level • Resource horizon • Demand uncertainty • Process uncertainty • Information • Principles: • Higher levels set resources and targets for next lower level • Postpone detailed decisions until uncertainty is reduced PROD 2800

  7. HPP example DECISION LEVEL DECISION INFORMATION Allocates production (time) among plants Annual demand by item and by region Corporate Determines seasonal plan by product type Monthly demand for 15 months by product type Plant manager Determines monthly item production schedules Monthly demand for 5 months by item Shop manager PROD 2800

  8. Business plan Marketing planning Financial planning Production planning Demand management Aggregate planning Resource planning Demand forecasts Master production scheduling Master requirements planning Inventory control Order Order scheduling Purchasing Dispatching PROD 2800

  9. Aggregate planning • Objective • Adjust resources to meet fluctuating demand. • Means • Aggregated production rate • Aggregated workforce level • Aggregated inventory level • Long-term • 1-5 years • Uniform measures • Frame for lower level planning • Basis for Facility Location Analysis PROD 2800

  10. Aggregation rules Customers Customers Customers Criteria? Measure? Market Regions Product Groups Machine Groups Labor Centers Products Machines Operators Products Machines Operators Products Machines Operators PROD 2800

  11. Time horizon in APP t PROD 2800

  12. Relevant costs • Production • Direct costs • Overtime/undertime costs • Capacity change • Hiring/firing costs • Extra setup costs, opportunity costs • Subcontracting • Inventory • Holding cost • Backorder/shortage costs PROD 2800

  13. Decision • Inventory level • Delivery regime (MTO,MTS) • Change in workforce • Change of load (overtime) • Subcontracting • Change of process • Complementary lines PROD 2800

  14. Capacity Strategies Aggregate demand t PROD 2800

  15. Classical LP Models • Dynamic, deterministic, piecewise linear costs • Objective: • Total expected cost • Decision: • Inventory/backlog • Workforce (hiring/firing) • Workload (overtime) PROD 2800

  16. Yield management • Demand management • Segmentation on • Price • Order regime • Service level • Management of • Duration • Cost PROD 2800

  17. Price/service duration matrix Fixed PRICE Variable Predictable DURATION Unpredictable PROD 2800

  18. Summary • Hierarchical planning principle • Aggregated planning • Level, chase, lead strategies • Workforce and inventory tradeoffs • Long-term horizon • Linear programming • Yield management PROD 2800

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