LESSON 8: AGGREGATE PLANNING. Outline Aggregate Planning Issues Costs Two Strategies Chase Strategy Level Strategy Optimization. Aggregate Production Planning.
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Model Working Individual/Total Sales
Number Hours Required Ratio
A5532 4.2 0.32
K4242 4.9 0.21L9898 5.1 0.17
L3800 5.2 0.14
M2624 5.4 0.10
M3880 5.8 0.06
= 4.856 hours
suppose that a firm produces three types of chairs: ladder-back chair, kitchen chair and desk chair. The aggregate production considers a fictitious aggregate unit of chair and find that the firm should produce 550 units of chairs in April. The MPS then translates this output in terms of three product types and four work-weeks in April. The MPS suggests that the firm produce 200 units of desk chairs in Week 1, 150 units of ladder-back chair in Week 2, and 200 units of kitchen chairs in Week 3.
for chair family
and MPS consider the volume of finished products, MRP plans for the components, and subassemblies. A firm may obtain the components by in-house production or purchasing. MRP prepares a plan of in-house production or purchasing requirements of components and subassemblies.
implemented. At the time of the next decision, a new forecast is appended and old forecasts may be revised. The new plan may recommend different production and workforce levels than were recommended earlier.
Costs in Aggregate Planning Smoothing Costs
Cost of capital - 15%
Taxes and insurance - 2%
Storage - 5%
Breakage/spoilage - 3%
Total - 25%
Costs in Aggregate Planning Inventory Holding and Shortage Costs
Section 3.1 - 3.3 , pp. 113-120 (4th Ed.), pp. 108-117 (5th Ed.)
8, p. 121 (4th Ed.), p. 117 (5th Ed.)