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Aggregate Planning, MRP, and Short Term Scheduling

Aggregate Planning, MRP, and Short Term Scheduling. Introduction. What – Determine the quantity and timing of production for the immediate future Where – To meet forecasted demand Why – Minimize costs. The Planning Process. Aggregate planning ties strategic goals to production plans

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Aggregate Planning, MRP, and Short Term Scheduling

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  1. Aggregate Planning, MRP, and Short Term Scheduling

  2. Introduction • What – Determine the quantity and timing of production for the immediate future • Where – To meet forecasted demand • Why – Minimize costs

  3. The Planning Process • Aggregate planning ties strategic goals to production plans • Medium range – 3 to 18 months • Requires: • Measure of sales and output • Forecast of demand for the period • Method of determining costs • Model that combines forecasts and costs

  4. Aggregate Plan Relationships Marketing Customer Demand Production Capacity Inventory Finance Cash Flow Human Resources Manpower Planning Aggregate Production Plan Procurement Supplier Performance Management Return on Investment Capital Engineering Design Completion

  5. Capacity Options • Change inventory levels • Change workforce size • Change production rates • Subcontracting • Using Part-Time Workers

  6. Demand Options • Influence demand • Back order during high demand periods • Counterseasonal product mix 

  7. Strategies • Chase strategy • Level strategy • Mixed strategy

  8. Aggregate Planning Problems • The Transportation Model of linear programming is a form of Aggregate Planning • Compare different strategies • Tabulate costs of the plan over a period of time

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