Professional Documents
Culture Documents
Aggre Plan
Aggre Plan
Aggre Plan
Planning
Quarter 1
JanFebMar
150,000120,000110,000
Quarter 2
AprMayJun
100,000130,000150,000
Quarter 3
JulAugSep
180,000150,000140,000
Subcontracting
Temporary measure during
periods ofpeak demand
May be costly
Assuring quality and timely
delivery may be difficult
Exposes your customers to a
possible competitor
Influencing demand
Use advertising or promotion to
increase demand in low periods
Attempt to shift
demand to slow
periods
May not be
sufficient to
balance demand
and capacity
© 2008 Prentice Hall, Inc. 10
Demand Options
70 –
Level production using average
60 – monthly forecast demand
50 –
40 –
30 –
0 –
JanFebMarAprMayJune=Month
221821212220=Number of
working days
6,000 –
Reduction
Cumulative demand units
5,000 – of inventory
Cumulative level 6,200 units
4,000 – production using
average monthly
forecast
3,000 – requirements
2,000 –
Cumulative forecast
1,000 – requirements
Excess inventory
–
JanFebMarAprMayJune
P l an 2
– s ub co
ntract
in g
70 –
60 – Level production
using lowest
50 – monthly forecast
demand
40 –
30 –
0 –
JanFebMarAprMayJune=Month
221821212220=Number of
working days
P l an 3
– hiring
a n d fi r
in g
Production = Expected Demand
60 –
50 –
40 –
30 –
0 –
JanFebMarAprMayJune=Month
221821212220=Number of
working days
Airline industry
Extremely complex planning
problem
Involves number offlights,
number ofpassengers, air and
ground personnel, allocation of
seats to fare classes
Resources spread through the
entire system
© 2008 Prentice Hall, Inc. 33
Yield Management
Allocating resources to customers at
prices that will maximize yield or
revenue
1. Service or product can be sold in
advance ofconsumption
2. Demand fluctuates
3. Capacity is relatively fixed
4. Demand can be segmented
5. Variable costs are low and fixed costs
are high
© 2008 Prentice Hall, Inc. 34
Necessary conditions to be
met are…
That there is a fixed amount of resources available for
sale.
That the resources sold are perishable (there is a time
limit to selling the resources, after which they cease to
be of value).
That different customers are willing to pay a different
price for using the same amount of resources.
Quadrant 1:Quadrant 2:
Unpredictable Predictable
Duration ofuse
MoviesHotels
Stadiums/arenasAirlines
Convention centersRental cars
Hotel meeting spaceCruise lines
Quadrant 3:Quadrant 4:
RestaurantsHospitals
Internet service
providers