Aggregate Planning Essay 2
Aggregate Planning
Aggregate Planning Aggregate planning is essentially a big-picture approach to planning. It is intermediate-range capacity planning that typically covers a time horizon of two to twelve months, although in some companies it may extend to as much as eighteen months. Aggregate planning is also sometimes known as sales and operations planning. Sales and operations planning is the intermediate-range decisions to balance supply and demand, integrating financial and operations planning. It is hard for organizations to predict the exact quantity and timing of demands for specific products and services in advance. In order to assess their capacity needs and costs months in advance in order to handle the demand, aggregate planning is very useful. The goal of aggregate planning is to achieve a production plan that will effectively utilize the organization 's resources to match expected demand. To meet this goal it is important for planners to make serious decisions regarding output rates, employment levels and changes, inventory levels and changes, back orders, and subcontracting in or out.(Stevenson, 2009) A key objective in business planning is to coordinate the intermediate plans of various organization functions such as marketing, finance, and operations. All of these areas must work together to form the aggregate plan. Aggregate planning decisions are strategic decisions that define the framework within which operating decisions will be made. The aggregate plan will have impacts throughout the supply chain, and should be shared with supply chain partners. All supply chain stages should work together on an aggregate plan that will optimize supply chain performance. This is important because it can help synchronize flow throughout the supply chain; it affects costs, equipment utilization, employment levels, and customer satisfaction. Overall, the aggregate plan will guide the more detailed planning that will eventually lead to a master schedule.
Aggregate Planning Aggregate planning is essentially a big-picture approach to planning. It is intermediate-range capacity planning that typically covers a time horizon of two to twelve months, although in some companies it may extend to as much as eighteen months. Aggregate planning is also sometimes known as sales and operations planning. Sales and operations planning is the intermediate-range decisions to balance supply and demand, integrating financial and operations planning. It is hard for organizations to predict the exact quantity and timing of demands for specific products and services in advance. In order to assess their capacity needs and costs months in advance in order to handle the demand, aggregate planning is very useful. The goal of aggregate planning is to achieve a production plan that will effectively utilize the organization 's resources to match expected demand. To meet this goal it is important for planners to make serious decisions regarding output rates, employment levels and changes, inventory levels and changes, back orders, and subcontracting in or out.(Stevenson, 2009) A key objective in business planning is to coordinate the intermediate plans of various organization functions such as marketing, finance, and operations. All of these areas must work together to form the aggregate plan. Aggregate planning decisions are strategic decisions that define the framework within which operating decisions will be made. The aggregate plan will have impacts throughout the supply chain, and should be shared with supply chain partners. All supply chain stages should work together on an aggregate plan that will optimize supply chain performance. This is important because it can help synchronize flow throughout the supply chain; it affects costs, equipment utilization, employment levels, and customer satisfaction. Overall, the aggregate plan will guide the more detailed planning that will eventually lead to a master schedule.
References: "Aggregate Planning." Encyclopedia of Management. Ed. Marilyn M. Helms. Gale Cengage, 2006 A Matter of Perception." Rock Products 112.11 (2009). Academic OneFile. Web. 3 Dec. Values in an Aggregate Scheduling Problem. Department of Engineering Technology Georgia SouthernUniversity, Georgia. Retrieved from http:// technologyinterface. nmsu.edu/winter97/ computers/spreadsheet.html Michaels, Daniel (2009, November 18) Leisure Travelers. The Wall Street Journal, , 19-20. Retrieved from http://online.wsj.com/article/SB10001424052748704431804574541640551685838.html Mills, Lauren (2009, November 9) nday-interview-brent-hoberman-big-plans-for-mydeco-but-long-road-to-profitability/ Simple card system." Plant & Works Engineering 330 (2009): 14 ASAP. Web. 6 Dec. 2009.