Professional Documents
Culture Documents
OBJECTIVES
Short
range Order Scheduling Employee Scheduling
6
second figure 0
Jan Feb Mar Apr May Jun
represents the
aggregate capacity 10000 9000
8000
of the company 8000
6000
What we want to do 6000
4500 4000 4000
is make these two 4000
Demand options
Influencing demand so that it matches
production capacity
Supply options
Adjusting capacity so that it matches demand
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Demand Options
Pricing
e.g.) price reductions for winter clothing in summer
Promotion
e.g.) adverting, direct marketing
Introducing complementary products/services
with different demand cycles
e.g.) heating and air conditioning repairs
Use of backorders
A backorder is a customer order that has not been filled
yet
9
Supply Options
Chase strategy
Chase demand by adjusting output level
The output level can be adjusted by varying workforce
size, overtime, and subcontracting
Level strategy
Maintain constant output rate
The plan builds up inventory during off-peak periods
and uses it during peak periods
Mixed strategy
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Level plan
Period Jan Feb Mar Apr May Jun
Demand 9,000 7,000 5,000 8,000 8,000 9,000
Production 7,700 7,700 7,700 7,700 7,700 7,700
Regular time 6,000 6,000 6,000 6,000 6,000 6,000
Overtime 1,200 1,200 1,200 1,200 1,200 1,200
Subcontractor 500 500 500 500 500 500
Inventory level
Beginning 200 -1,100 -400 2,300 2,000 1,700
Ending -1,100 -400 2,300 2,000 1,700 400
On-hand inventory 0 0 2,300 2,000 1,700 400
Backorders 1,100 400 0 0 0 0
200+7700-9000 -400+7700-5000
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1100 units $10 per unit per month 2300 units $3 per unit per month