Introduction

u0Aggregate Plan:
u1 A statement of a company’s
production rates, workforce
levels, and inventory holdings
based on estimates of customer
requirements and capacity
limitations
The Purpose of
Aggregate Plans
u2The aggregate plan is useful
because:
u3 it focuses on a general course
of action
 u4 consistent with the company’s
strategic goals and objectives
without getting bogged down in
details

The Concept of
Aggregation
u5Aggregate planning is essentially a
“big-picture” approach to
planning.
u6 avoid focusing on individual
products or services
u7 focus on a group of similar products
or services
 u8 For purposes of aggregate planning,
it is often convenient to think of
capacity in terms of labor hours or
machine hours per period, or output
rates (barrels per period, units per
period), without worrying about how
much of a particular item will actually
be involved.

Aggregate Planning
u9The main idea behind aggregate planning:

Aggregate planning translates business plans into

rough labor schedules and production plans

u10 Issues to consider for aggregate planning

 u11 Production rate: “aggregate units” per
worker per unit time

u12 Workforce level: available workforce in

terms of hours

u13 Actual production: Production rate x

Workforce level

u14 Inventory: Units carried over from previous

periods

u15 Costs: production, changing workforce,

inventory

Why Aggregate Planning is

Necessary
u16 Fully load facilities and
minimize overloading and
underloading
u17 Make sure enough capacity
available to satisfy expected
demand
u18 Plan for the orderly and
systematic change of production
capacity to meet the peaks and
valleys of expected customer
demand
u19 Get the most output for the
amount of resources available

Aggregate Planning
Goals
u20 Meet demand
u21 Use capacity efficiently
u22 Meet inventory policy
u23 Minimize cost
u24 Labor
u25 Inventory
u26 Plant & equipment
u27 Subcontract

Managerial Importance of
Aggregate Plans
u28 Managerial Inputs
u29 Typical Objectives
u30 Reactive Alternatives
u31 Aggressive Alternatives
u32 Planning Strategies
u33 Typical Objectives:
u34 The many functional areas
in an organization that give input
to the aggregate plan typically
have conflicting objectives for
the use of organization’s
resources
u35 Six objectives usually are
considered, as in the next slide
Aggregate Planning
Objectives
u36 Balancing these various
objectives to arrive at an
acceptable aggregate plan
involves consideration of two
basic types of alternatives:
u37 Reactive alternatives
u38 Aggressive alternatives

Matching
Demand and Supply
u39 Proactive
u40 Alter demand to match supply
(capacity)
u41 Among other approaches, we can
alter demand by simply changing the
price.
u42 Reactive
 u43 Alter supply (capacity) to match
demand
u44 Through capacity planning and
aggregate planning
u45 Mixed
u46 Some of each

u47 Reactive Alternatives:

u48 Actions that can be taken to cope
with demand requirement
u49 Typically, an operations
manager controls reactive
alternatives
u50 Operations manager accepts
forecasted demand as a given and
modifies the following factors to
meet that demand:
u51 Workforce levels
u52 Overtime
u53 Vacation schedules
u54 Inventory levels
u55 Subcontracting
u56 Planned backlogs

u57 Aggressive Alternatives:

u58 Actions that attempt to
modify demand and,
consequently, resource
requirements
u59 Typically, marketing
managers are responsible for
specifying these actions in the
marketing plan
u60 Actions can be taken:
u61 Produce complementary
products
u62 Creative pricing
Teknik lain LP
yandra_ipb@yahoo.co
m
yandra.arkeman@gmai
l.com
08121114359
dhani.sw@apps.ipb.ac.i
d
081514003874