Aggregate Production Planning
National Institute of Technology Calicut
Department of Mechanical Engineering
PRODUCTION PLANNING (AGGREGATE PLANNING)
§ § § § Concerned with the overall operations of an organisation over a specified time horizon Determines the efficient way of responding (allocating resources) to market conditions Effectively allocate system capacity (plant, equipment, and manpower) over designated period A good production plan should Ø be consistent with organisational policy Ø meet demand requirements Ø be within capacity constraints Ø minimizes costs A medium range tactical problem of establishing aggregate production rates, work force sizes, inventory levels and possibly shipping rates States the mission manufacturing must accomplish if the firm’s overall objectives are to be met Managerial objective is to develop an integrated game plan whose manufacturing portion is the production plan The production plan, therefore, links strategic goals to production and is coordinated with sales objectives, resource availabilities, and financial budgets Game plan considers an integrated view of marketing, finance and production
§ § § § §
Planning Level Long Range
Policy, Product, Process, & Plant Decisions
Orientation Strategic
Aggregate Intermediate Range Planning Linking Activity
Short Range
• LONG RANGE - products - processes
Operations Decisions
Operational
Fig. 1 Relationship between aggregate planning and other planning stages
Production Planning
18
National Institute of Technology Calicut
Department of Mechanical Engineering
•
•
- plant location - plant layout INTERMEDIATE RANGE (Aggregates) - output rates - employment levels - inventory - subcontracting SHORT RANGE - job assignments - machine loading - job sequencing - lot sizes
Marketing Planning
“The Game Plan”
Financial Planning
MPC boundary
Resource planning
Production Planning
Demand Management
Master Production Scheduling
Fig. 2. Key Linkages of
Department of Mechanical Engineering
PRODUCTION PLANNING (AGGREGATE PLANNING)
§ § § § Concerned with the overall operations of an organisation over a specified time horizon Determines the efficient way of responding (allocating resources) to market conditions Effectively allocate system capacity (plant, equipment, and manpower) over designated period A good production plan should Ø be consistent with organisational policy Ø meet demand requirements Ø be within capacity constraints Ø minimizes costs A medium range tactical problem of establishing aggregate production rates, work force sizes, inventory levels and possibly shipping rates States the mission manufacturing must accomplish if the firm’s overall objectives are to be met Managerial objective is to develop an integrated game plan whose manufacturing portion is the production plan The production plan, therefore, links strategic goals to production and is coordinated with sales objectives, resource availabilities, and financial budgets Game plan considers an integrated view of marketing, finance and production
§ § § § §
Planning Level Long Range
Policy, Product, Process, & Plant Decisions
Orientation Strategic
Aggregate Intermediate Range Planning Linking Activity
Short Range
• LONG RANGE - products - processes
Operations Decisions
Operational
Fig. 1 Relationship between aggregate planning and other planning stages
Production Planning
18
National Institute of Technology Calicut
Department of Mechanical Engineering
•
•
- plant location - plant layout INTERMEDIATE RANGE (Aggregates) - output rates - employment levels - inventory - subcontracting SHORT RANGE - job assignments - machine loading - job sequencing - lot sizes
Marketing Planning
“The Game Plan”
Financial Planning
MPC boundary
Resource planning
Production Planning
Demand Management
Master Production Scheduling
Fig. 2. Key Linkages of