Title: Discuss the primary objective and operational parameters of aggregate planning. Post by: ahker on Oct 21, 2017 Discuss the primary objective and operational parameters of aggregate planning.
Title: Re: Discuss the primary objective and operational parameters of aggregate planning. Post by: LBCea on Oct 21, 2017 The goal of aggregate planning is to satisfy demand in a way that maximizes profit. Aggregate planning is a process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon. The aggregate planner's main objective is to identify the following operational parameters over the specified time horizon:
• Production rate: the number of units completed per unit time (such as per week or per month). • Workforce: the number of workers/units of capacity needed for production. • Overtime: the amount of overtime production planned. • Machine capacity level: the number of units of machine capacity needed for production. • Subcontracting: the subcontracted capacity required over the planning horizon. • Backlog: demand not satisfied in the period in which it arises but carried over to future periods. • Inventory on hand: the planned inventory carried over the various periods in the planning horizon. The aggregate plan serves as a broad blueprint for operations and establishes the parameters within which short-term production and distribution decisions are made. The aggregate plan allows the supply chain to alter capacity allocations and change supply contracts. |