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STRATEGIC
CONSTRAINTS
FEEDBACK
AGGREGATE PLANNING
Workforce Size
Inventory levels
Production rates
FEEDBACK
TACTICAL
CONSTRAINTS
PRODUCTION SCHEDULING
Work center scheduling
Materials requirements planning
Workforce scheduling
FEEDBACK
CONSTRAINTS
OPERATIONAL
Labor. Labor is aggregated by specifying a workforce size rather than by dealing with
individual workers or job classifications. Workforce flexibility helps to make this a
useful approximation. If greater accuracy is required, planning can be on the basis of
work groups or entire shifts.
Time. A typical aggregate plan is based on a planning horizon of 12 months. In it, all
decisions (workforce size, production volume, inventory levels, etc.) are specified on a
monthly basis. To deal with the fact the months have differing numbers of available
production days, some companies plan on the basis of 4-4-5 week months.
Managerial Inputs
Operations
Current machine capacities
Workforce capacities
Future capacity plans
Materials
Supplier capabilities
Storage capacity
Materials availability
Distribution/marketing
Customer needs
Demand forecasts
Competition behavior
Aggregat
e Plan
Typical Objectives
Engineering
New products
Change orders
Machine standards
Human resources
Labor market conditions
Training capacity
Variation in demand rates over the planning horizon is the single greatest challenge in
aggregate planning. Without it, workforces would be stable, production rates constant
and inventories minimal. There are two sets of alternatives for dealing with demand
variation.
Reactive alternatives. These approaches accept demand variation as given and react to
it attempting to keep costs low.
Workforce adjustments
Anticipation inventory
Workforce utilization (overtime/undertime)
Vacation schedules
Subcontractors
Backlogs, backorders and stockouts
Aggressive alternatives. These approaches attempt to moderate demand variation to
achieve production efficiencies and reduce costs.
Complementary products
Promotional campaigns
Creative pricing
The Planning Process
Determine
requirements for
planning horizon.
Identify alternatives,
constraints and costs.
No
Implement and
update the plan.
Prepare prospective
plan for planning
horizon.
Is the plan
acceptable
?
Yes
Aggregate Plan
REd
04:57 PM
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
21.0
0.0
0.0
3348.2
92.0%
0.0
N/A
SHIFT: 2
Available Workers
Hires
Layoffs
Regular hours
Utilization
Overtime hours
Utilization
17.9
1.0
0.0
2849.7
91.9%
1068.8
91.9%
17.9
0.0
0.0
2849.7
91.9%
1068.8
91.9%
17.9
0.0
0.0
2849.7
91.9%
624.4
53.7%
17.9
0.0
0.0
2849.7
91.9%
350.3
30.1%
17.9
0.0
0.0
2849.7
91.9%
786.8
67.6%
17.9
0.0
0.0
2849.7
91.9%
1068.8
91.9%
17.9
0.0
0.0
2849.7
91.9%
1068.8
91.9%
17.9
0.0
0.0
2849.7
91.9%
1068.8
91.9%
15.0
0.0
2.9
2389.0
91.9%
896.0
91.9%
13.5
0.0
1.5
2156.3
92.2%
808.7
92.2%
13.5
0.0
0.0
2156.3
92.2%
597.9
68.1%
16.9
1.9
0.0
2696.0
92.1%
1011.2
92.1%
726,748
4,350
4,400
192,758
Inventory cost
Total cost
20,218
1,744,506
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
SHIFT: 1
Regular wage
Hiring cost
Layoff cost
Overtime cost
65,961
4,500
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
65,961
0
0
0
SHIFT: 2
Regular wage
Hiring cost
Layoff cost
Overtime cost
60,772
2,850
0
18,707
64,368
1,500
0
19,773
64,368
0
0
19,773
64,368
0
0
11,551
64,368
0
0
6,481
64,368
0
0
14,556
64,368
0
0
19,773
64,368
0
0
19,773
64,368
0
0
19,773
53,940
0
2,900
16,576
48,546
0
1,500
14,961
48,546
0
0
11,061
3,759
1,716
1,085
1,085
1,085
2,822
3,241
1,085
1,085
1,085
1,085
1,085
156,549
153,318
151,187
142,965
137,895
147,707
153,343
151,187
151,187
140,462
132,053
126,653
Inventory cost
Total cost
PRODUCTION REPORTS
F001
Beg inventory
Reg Prod Shift 1
OT Prod Shift 1
Reg Prod Shift 2
OT Prod Shift 2
Total production
Demand
End Inventory
MAR
325
0
0
25
895
920
1070
175
APR
175
0
0
216
946
1163
1258
79
MAY
79
0
0
200
946
1147
1176
50
JUN
50
0
0
536
553
1089
1089
50
JUL
50
0
0
771
310
1081
1081
50
AUG
50
0
0
450
696
1147
1066
131
SEP
131
0
0
232
946
1178
1159
151
OCT
151
0
0
237
946
1183
1284
50
NOV
50
0
0
254
946
1200
1200
50
DEC
50
0
0
307
793
1100
1100
50
JAN
50
0
0
287
716
1003
1003
50
FEB
50
0
0
418
529
947
947
50
F002
Beg inventory
Reg Prod Shift 1
OT Prod Shift 1
Reg Prod Shift 2
OT Prod Shift 2
Total production
Demand
End Inventory
MAR
125
2877
0
0
0
2877
2578
424
APR
424
2582
0
0
0
2582
2814
192
MAY
192
2698
0
0
0
2698
2770
120
JUN
120
2669
0
0
0
2669
2669
120
JUL
120
2595
0
0
0
2595
2595
120
AUG
120
2798
0
0
0
2798
2601
317
SEP
317
2842
0
0
0
2842
2794
365
OCT
365
2701
0
0
0
2701
2946
120
NOV
120
2827
0
0
0
2827
2827
120
DEC
120
2744
0
0
0
2744
2744
120
JAN
120
2716
0
0
0
2716
2716
120
FEB
120
2664
0
0
0
2664
2664
120
F003
Beg inventory
Reg Prod Shift 1
OT Prod Shift 1
Reg Prod Shift 2
OT Prod Shift 2
Total production
Demand
End Inventory
MAR
208
4
0
2265
0
2269
2140
337
APR
337
295
0
2212
0
2507
2688
156
MAY
156
180
0
2227
0
2407
2463
100
JUN
100
209
0
1905
0
2114
2114
100
JUL
100
282
0
1680
0
1962
1962
100
AUG
100
82
0
1987
0
2069
1915
254
SEP
254
39
0
2196
0
2235
2198
291
OCT
291
178
0
2192
0
2369
2560
100
NOV
100
53
0
2176
0
2229
2229
100
DEC
100
135
0
1734
0
1869
1869
100
JAN
100
163
0
1555
0
1718
1718
100
FEB
100
214
0
1430
0
1644
1644
100
MAR
1070
2578
2140
APR
1258
2814
2688
MAY
1176
2770
2463
JUN
1089
2669
2114
JUL
1081
2595
1962
WORKFORCE DATA
Regular wage cost per month
Overtime cost per hour
Maximum monthly regular hours
Maximum monthly overtime hours
Hiring cost
Layoff cost
Initial number of workers
Maximum number of workers
Maximum labor utilization
Shift1
3141
0.00
173.3
0.0
1500
1000
18
21
92%
INVENTORY/PRODUCTIVITY DATA
Holding Cost
Initial
Product
Per Month
Inventory
F001
3.8697
325
F002
4.0152
125
F003
4.1004
208
Shift2
3596
18.50
173.3
65.0
1500
1000
15
21
92%
Minimum
Inventory
50
120
100
Labor Hours
Per Unit
1.1297
1.1621
1.1780
AUG
1066
2601
1915
SEP
1159
2794
2198
OCT
1284
2946
2560
NOV
1200
2827
2229
DEC
1100
2744
1869
JAN
1003
2716
1718
FEB
947
2664
1644