AGGREGATE PLANNING
IN A SERVICE UNIT
ASSAM INSTITUTE OF MANAGEMENT
COMPILED BY –
SARGAM ( 64/D/2009)
SAURABH ( 65/D/2009 )
SHYAMALI ( 66/D/2009 )
MAHFUZA (67/D/2009 )
TONMI (68/D/2009 )
UDATTA ( 69/D/2009 )
URSHILA ( 70/D/2009 )
 AN OVERVIEW
We have selected a tailoring house as an element of
study. The tailoring house is located in the heart of
Guwahati city, in the Fancy Bazar area opposite of the
RD Store.
We also like to offer our gratitude to M/S. Deepak
Tailor for providing us some of their confidential data
for the successful completion of the project within the
stipulated time.

ASSAM INSTITUTE OF MANAGEMENT

 NORMAL SCENARIO
TOOLS AND EQUIPMENTS –
• Sewing Machine
• Machine Oil
• Handy tools namely scissors, threads and needles, chalk and
metre scale
• Miscellany items
LABOR STRENGTH –
• Eight labors of equal expertise.
• Two labors specialized in stitching ornamental designer wear.

WORKING SCHDULE –
• 12 hours round the clock viz. 0900 hrs to 2100 hrs.
ASSAM INSTITUTE OF MANAGEMENT
 PRODUCTION PLANNING
STRATEGIES
 Stable workforce – variable work hours

 Subcontracting

 Customer scheduling

 Chase strategy

ASSAM INSTITUTE OF MANAGEMENT

 STABLE WORKFORCE –
VARIABLE WORK HOURS

This strategy is usually adopted when there is a

slight increase in the demand. The output can be
increased by 12 to 15 percent only. The output is
varied by flexible work schedules or overtime.

ASSAM INSTITUTE OF MANAGEMENT

UNDER NORMAL CONDITION –
Time taken by 1 labor to make 1 shirt = 2 hrs
( Under normal condition 1 labor can make only 4 shirts within their schedule time )
Time taken by 1 labor to make 4 shirts = 8 hrs.
Total shirts that can be made per day by 8 labors = 4*8= 32 shirts.

IN CASE OF OVERTIME ( if a labor can produce more than 4 shirts, that is counted under overtime.)
Time taken by 1 labor to make 5 shirts = 8 hrs.
Time taken by 1 labor to make 2 more shirts = 3 hrs.
Total shirts that can be made per day by 1 labor = 7 shirts.
Total shirts that can be made per day by 8 labors = 7*8 = 56 shirts

Number of shirts increased by = 56-32= 24 shirts

ASSAM INSTITUTE OF MANAGEMENT

 LABOR PAYMENT VARIATION
DURING OVERTIME
COMODITY PAYMENT UNDER( in Rs)
Normal During Total Percent
condition Overtime increased
Pant per piece 60 +20 80 25.00%
Shirt per piece 35 +20 55 36.36%
Suit per piece 430 +50 480 10.41%

ASSAM INSTITUTE OF MANAGEMENT

 CUSTOMER SCHEDULING
In order to cope up with the heavy orders the firm
adopt to this strategy of customer scheduling. In this
case the firm increases the lead time from the view
point of the customer ie., it increases the time length
between the ordering and the delivery period.

ASSAM INSTITUTE OF MANAGEMENT

 CONSEQUENCES
COMMODITY ACTUAL ADJUSTED LEAD TIME
LEAD TIME LEAD TIME INCREASES
BY
Pant 3 days 7 days 4 days

Shirt 2 days 7 days 5 days

Suit 7 days 14 days 7 days

ASSAM INSTITUTE OF MANAGEMENT

 SUBCONTRACTING
This strategy is adopted when the firm wants to
increase the output level in order to fulfil the
demand. This strategy is usually practiced during
certain festive seasons, beginning of the new
academic sessions of the educational institute when
there is a heavy orders for stitching of uniforms and
also in certain peak seasons.

ASSAM INSTITUTE OF MANAGEMENT

 CONSEQUENCES OF
SUBCONTRACTING

• Loss of customer goodwill.

• Profit margin of only around 13.2%.

ASSAM INSTITUTE OF MANAGEMENT

 CHASE STRATEGY

This strategy is basically adopted during the winter

season because at this hour the order rises to a peak
level. They hire additional four labors and the
process of hiring starts a month before the advent of
the winter season. They are hired on contractual
basis.

ASSAM INSTITUTE OF MANAGEMENT

 DRAWBACKS
• Servicing charges beard on the maintenance of
extra sewing machine if remaining idle.

• Rejection of the demands of the individual

customers results in hampering their goodwill during
the peak season.

• In case of chase strategy there is an additional cost

in hiring.

ASSAM INSTITUTE OF MANAGEMENT

 RECOMMENDATION
 Sometimes they rejects the offers from the
individual customers during the peak season. This as
a result hampers their goodwill. Moreover, these
individual customers are also the source of income
during the non festive season. So they should not
reject the offers of these flying customers. So they
should hire more labors to be on the safer side.

ASSAM INSTITUTE OF MANAGEMENT

ASSAM INSTITUTE OF MANAGEMENT
ASSAM INSTITUTE OF MANAGEMENT
 FOR EXAMPLE –

In case of uniform,
Total amount charged = Rs. 150.
On subcontracting,
Amount paid to the subcontracted firm= Rs. 130
Amount taken by the domestic firm = Rs. 20
Profit earned = (20/150) * 100 %
= 13.33%

ASSAM INSTITUTE OF MANAGEMENT