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    Supply Chain Balancing Through Aggregate Planning (Using LPP)

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    Nirmal Raj Deivasigamani
    The document discusses using aggregate planning to balance supply and demand in a supply chain. It provides demand forecasts for different periods and costs associated with inventory, hiring/layoffs, overtime, and outsourcing production. The objective is to find an optimal aggregate plan that minimizes total costs by determining the optimal workforce levels, production levels, inventory levels, and amounts of outsourcing or backlog for each period. A linear programming problem is formulated with decision variables and constraints to solve this aggregate planning problem and balance the supply chain at minimum cost.

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    Supply Chain Balancing Through Aggregate Planning (Using LPP)

    Uploaded by

    Nirmal Raj Deivasigamani
    24 views6 pages
    The document discusses using aggregate planning to balance supply and demand in a supply chain. It provides demand forecasts for different periods and costs associated with inventory, hiring/layoffs, overtime, and outsourcing production. The objective is to find an optimal aggregate plan that minimizes total costs by determining the optimal workforce levels, production levels, inventory levels, and amounts of outsourcing or backlog for each period. A linear programming problem is formulated with decision variables and constraints to solve this aggregate planning problem and balance the supply chain at minimum cost.

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    The document discusses using aggregate planning to balance supply and demand in a supply chain. It provides demand forecasts for different periods and costs associated with inventory, hiring/layoffs, overtime, and outsourcing production. The objective is to find an optimal aggregate plan that minimizes total costs by determining the optimal workforce levels, production levels, inventory levels, and amounts of outsourcing or backlog for each period. A linear programming problem is formulated with decision variables and constraints to solve this aggregate planning problem and balance the supply chain at minimum cost.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    24 views6 pages

    Supply Chain Balancing Through Aggregate Planning (Using LPP)

    Uploaded by

    Nirmal Raj Deivasigamani
    The document discusses using aggregate planning to balance supply and demand in a supply chain. It provides demand forecasts for different periods and costs associated with inventory, hiring/layoffs, overtime, and outsourcing production. The objective is to find an optimal aggregate plan that minimizes total costs by determining the optimal workforce levels, production levels, inventory levels, and amounts of outsourcing or backlog for each period. A linear programming problem is formulated with decision variables and constraints to solve this aggregate planning problem and balance the supply chain at minimum cost.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 6

    Supply Chain Balancing through Aggregate Plan

    Demands are estimated using software tools and feedback system from the Distribution channel
    Month Oct Nov Dec Jan Feb Mar Demand 1600 3000 3200 3800 2200 2200 Items Material Inventory Holding cost Marginal Cost of stock out / backlog Hiring and Training Cost Lay off cost Labour Hrs reqd Working Hrs Working days Regular time LH cost Overtime LH cost Cost of Out Outsourcing Maxm Over time allowed

    Workfoce at the beginning of the period Opening Inventory at the beginning of the period Target Inventory at the end of the period No back log shortage at the end of the planning horizon Find the optimal Aggregte Planning which balances the supply chain, by minimising the cost

    Decision Variables No of Lay off Emloyees (Lt) 16.00 0.00 0.00

    Period (t) 0 1 2 3

    No of Hired Emloyees (Ht) 0 0 0

    Workforce Size (Wt) 80 64.00 64.00 64.00

    4 5 6

    0 0 0

    0.00 0.00 0.00

    64.00 64.00 64.00

    Aggregate Cost Cost of Laying Off


    8000.00 0.00 0.00 0.00 0.00 0.00

    Period (t)
    1 2 3 4 5 6

    Hiring Cost
    0 0 0 0 0 0

    Regular Wages
    40960.00 40960.00 40960.00 40960.00 40960.00 40960.00

    Total Cost

    422660
    Constraints

    Period (t)
    1 2 3 4 5 6

    Workforce 0 0 0 0 0 0

    Capacity 0 0 0 0 0 0

    Inventory 0 0 0 0 0 0

    hrough Aggregate Planning (Using LPP)

    Cost 10 2 5 300 500 4 8 20 4 6 30 10


    80 1000 500

    per unit per unit per month per unit per month per worker per worker per unit per day per month per hour per hour per unit per worker per month

    n, by minimising the cost

    Overtime (Ot) 0.00 0.00 0.00

    Inventory (It) 1000 1960.00 1520.00 880.00

    Shortage Units (St)


    0.00 0.00 0.00

    Subcontracted Units (Ct)


    0.00 0.00 0.00

    0.00 0.00 0.00

    0.00 140.00 500.00

    220.00 0.00 0.00

    140.00 0.00 0.00

    Overtime Wages
    0.00 0.00 0.00 0.00 0.00 0.00

    Inventory holding Cost


    3920.00 3040.00 1760.00 0.00 280.00 1000.00

    Subcontracting Shortage Cost cost


    0.00 0.00 0.00 1100.00 0.00 0.00 0.00 0.00 0.00 4200.00 0.00 0.00

    Overtime -640 -640 -640 -640 -640 -640

    Total Production (Pt)


    2560.00 2560.00 2560.00

    Demand
    1600 3000 3200

    2560.00 2560.00 2560.00

    3800 2200 2200

    Material Cost
    25600.00 25600.00 25600.00 25600.00 25600.00 25600.00

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