aggregate and capacity planning

7/21/2019 Aggregate and Capacity Planning

http://slidepdf.com/reader/full/aggregate-and-capacity-planning 1/19

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All

1

Chapter 14

Aggregate Sales and

Operations Planning




2

Sales and Operations Planning

The Aggregate Operations Plan

Examples: Chase and Levelstrategies

OBJECTIVES




3

Master scheduling

Material requirements planning

Order scheduling

Weekly workforce and

customer scheduling

Daily workforce and customer scheduling

Process planning

Strategic capacity planning

Sales and operations aggregate! planning

"ong

range

#ntermediat

e

range

Short

range

Manufacturing

Ser$ices

%&hi'it 1()1

%&hi'it 1()1

Sales plan *ggregate operations plan

+orecasting

, demand

management




(

Sales and Operations Planning

Activities

Long-range planning – Greater than one year planning horizon – Usally per!ormed in annal in"rements

#edim-range planning – Six to eighteen months – Usally $ith $ee%ly& monthly or 'arterly

in"rements

Short-range planning – One day to less than six months – Usally $ith $ee%ly or daily in"rements




-

The Aggregate Operations Plan

#ain prpose: Spe"i!y the optimal"om(ination o! – prod"tion rate )nits "ompleted per

nit o! time*

– $or%!or"e level )nm(er o! $or%ers* – inventory on hand )inventory "arried

!rom previos period* Prod"t grop or (road "ategory

)Aggregation* This planning is done over anintermediate-range planning period o! +to , months




.

Balancing Aggregate Demand

and Aggregate Production apacity

/

2///

(///

.///

0///

1////

an +e' Mar *pr May un

(-//--//

///

1////

0///

.///

/

2///

(///

.///

0///

1////

an +e' Mar *pr May un

(-// (///

///0///

(///

.///

Sppose the !igre tothe right represents!ore"ast demand innits

Sppose the !igre tothe right represents!ore"ast demand innits

.o$ sppose thislo$er !igre representsthe aggregate "apa"ityo! the "ompany tomeet demand

.o$ sppose thislo$er !igre representsthe aggregate "apa"ityo! the "ompany tomeet demand

/hat $e $ant to do is(alan"e ot theprod"tion rate&$or%!or"e levels& andinventory to ma%ethese !igres mat"h p

/hat $e $ant to do is(alan"e ot theprod"tion rate&$or%!or"e levels& andinventory to ma%ethese !igres mat"h p


http://slidepdf.com/reader/full/aggregate-and-capacity-planning 7/19McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All

Required nputs to the Production

Planning System

Planningfor

production

External

capacity

Competitors’bea!ior

"a# materiala!ailability

$ar%etdemand

Economic

conditions

Current

pysical

capacity

Current

#or%force

In!entory

le!els

&cti!ities

re'uired

for

production

External

to firm

Internal

to firm



0

!ey Strategies "or #eeting Demand

Chase

Level

Some "om(ination o! the t$o



Aggregate Planning $%amples& 'nit

Demand and ost Data

Materials 4-5unit6olding costs 415unit per mo)

Marginal cost of stockout 41)2-5unit per mo)

6iring and training cost 42//5worker

"ayoff costs 42-/5worker

"a'or hours required )1- hrs5unitStraight time la'or cost 405hour

7eginning in$entory 2-/ units

Producti$e hours5worker5day )2-

Paid straight hrs5day 0

Sppose $e have the !ollo$ing nitdemand and "ost in!ormation:

Sppose $e have the !ollo$ing nit

demand and "ost in!ormation:

Demand5mo an +e' Mar *pr May un

(-// --// /// 1//// 0/// .///



1/

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

Unis/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

Producti$e hours5worker5day )2-

Paid straight hrs5day 0

Demand5mo an +e' Mar *pr May

un

(-// --// /// 1//// 0///

.///

Given the demand and "ost in!ormation (elo$& $hat

are the aggregate hors0$or%er0month& nits0$or%er& anddollars0$or%er1

Given the demand and "ost in!ormation (elo$& $hat

are the aggregate hors0$or%er0month& nits0$or%er& anddollars0$or%er1

)2-&2

2

)2-&/)1-8(0)33

,

0()33&2281/.3)33

22&0hrs&40841(/

0

ut(and(Try $%ample& Determining

Straight )a*or osts and Output



11

hase Strategy

+,iring - .iring to meet demand/

Jan

Days/mo 22

Hrs/worker/mo 159.5

Unis/worker 1$0!3.33

#/worker #1$40"

Jan

Deman% 4$500

&e'. in). 250

*e re+. 4$250,e+. workers 3.997

Hire%

Fire% 3

-orkore 4

n%in' in)enory 0

Lets assme or "rrent $or%!or"e is 2$or%ers3

Lets assme or "rrent $or%!or"e is 2$or%ers3

4irst& "al"late net re'irements !orprod"tion& or 5677-86795867 nits

Then& "al"late nm(er o! $or%ersneeded to prod"e the netre'irements& or58670,7+3++9+3;;2 or 5 $or%ers

4inally& determine the nm(er o!$or%ers to hire0!ire3 <n this "ase $eonly need 5 $or%ers& $e have 2& so+ "an (e !ired3



12

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

Unis/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'. in). 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

Hire% 2 1 3

Fire% 3 2 1

-orkore 4 ! 7 10 " 7

n%in' in)enory 0 0 0 0 0 0

=elo$ are the "omplete "al"lations !or the remainingmonths in the six month planning horizon




13

J an Feb Mar Apr May Jun

Deman% 4$500 5$500 7$000 10$000 "$000 !$000&e'. in). 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

Hire% 2 1 3

Fire% 3 2 1-orkore 4 ! 7 10 " 7

n%in' in)enory 0 0 0 0 0 0

Jan Feb Mar Apr May Jun oss

Maeria #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

Hirin' os 400.00 200.00 !00.00 1$200.00

Firin' os 750.00 500.00 250.00 1$500.00

>8:7&57-3:8

=elo$ are the "omplete "al"lations !or the remaining months inthe six month planning horizon $ith the other "osts in"lded



1(

)evel 0or1"orce Strategy +Surplus

and Shortage Allo2ed/

Jan

Deman% 4$500

&e'. in). 250

*e re+. 4$250

-orkers !

ro%uion !$3"0n%in' in)enory 2$130

urpus 2$130

6ora'e

Lets ta%e the same pro(lem as(e!ore (t this time se theLevel /or%!or"e strategy

Lets ta%e the same pro(lem as(e!ore (t this time se theLevel /or%!or"e strategy

This time $e $ill see% to sea $or%!or"e level o! $or%ersThis time $e $ill see% to sea $or%!or"e level o! $or%ers

1



1-


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

Beg. inv. 250 2,10 2,140 1,20 !2,680 !1,00

"e# re$. 4,250 ,70 4,860 8,770 10,680 7,00

%&r'er( 6 6 6 6 6 6

)r&du*#i&n 6,80 5,510 6,0+0 6,0+0 6,80 5,800

nding inven#&r 2,10 2,140 1,20 !2,680 !1,00 !1,500

-urpu( 2,10 2,140 1,20

-/&r#age 2,680 1,00 1,500

"&#e, i0 1e re*a.*u.a#e #/i( (/ee# 1i#/ 7 1&r'er(

1e 1&u.d /ave a (urp.u(

"&#e, i0 1e re*a.*u.a#e #/i( (/ee# 1i#/ 7 1&r'er(

1e 1&u.d /ave a (urp.u(



1.



1.


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

250 2,10 10 !+10 !,+10 !1,620

4,250 ,70 4,860 8,770 10,680 7,00

6 6 6 6 6 6

6,80 5,510 6,0+0 6,0+0 6,80 5,800

2,10 2,140 1,20 !2,680 !1,00 !1,500

2,10 2,140 1,20

2,680 1,00 1,500


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

1,+00 27,550 0,450 0,450 1,+00 2+,000 181,250.00

2,10 2,140 1,20 5,500.00

,50 1,625 1,875 6,850.00

>85,&:77377

Belo# are te complete calculations for te

remaining monts in te six mont planning

ori(on #it te oter costs included

Belo# are te complete calculations for te

remaining monts in te six mont planning

ori(on #it te oter costs included

.ote& total"osts nderthis strategyare less thanChase at>8735738

.ote& total"osts nderthis strategy

are less thanChase at>8735738

3ab&r

Ma#eria.

-#&rage

-#&*'&u#

1



1

3ield #anagement 4pera#ing 5ie.d Managemen# -y(#em(

Addre((e( pr&b.em( .i'e4verb&&'ing

Fare 6.a((e(

)remium -ea#(

-ing.e 4rder uan#i#ie(

10



10

Strategic Capacity

#anagement 6apa*i#y Managemen# 6&n*ep#(

*&n&mie( and Di(e*&n&mie( &0 -*a.e 3earning 6urve

6apa*i#y ).anning

– De*i(i&n #ree a( a #&&. #& eva.ua#e *apa*i#y

a.#erna#ive(

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Decision Tree

aggregate and capacity planning

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