Bus 105

Activities preceding and following aggregate sales and operations planning (ex. 19.1)

main purpose of aggregate operations planning pg. 490
  * The aggregate operations plan is concerned with setting production rates by product group or other broad categories for the intermediate term (3 to 18 months).
  * The main purpose of the aggregate plan is to specify the optimal combination of production rate, workforce level, and inventory on hand.
  * Production rate refers to the number of units completed per unit of time (such as per hour or per day). 
  * Workforce level is the number of workers needed for production (production = production rate × workforce level). 
  * Inventory on hand is unused inventory carried over from the previous period.

Required inputs for aggregate operations planning (ex 19.2)
  * Current physical capacity
  * Current workforce
  * Inventory levels
  * Activities required for production

External inputs to the firm in Aggregate operations planning (ex 19.2)
  * External capacity (such as subcontractors)
  * Competitors behavior
  * Raw Material availability
  * Market Demand
  * Economic Conditions

production planning strategies.
  * There are three production planning strategies: trade-offs among the workforce size, work hours, inventory and backlogs.
      * Chase strategy: Match the production rate to the order rate by hiring and laying off employees as the order rate varies. The success of this strategy depends on having a pool of easily trained applicants to draw on as order volumes increase. There are obvious motivational impacts. When order backlogs are low, employees may feel compelled to slow down out of fear of being laid off as soon as existing orders are completed.
      * Stable workforce-variable work hours: Vary the output by carrying the number of wok hours, you can match production quantities to orders. This strategy provides workforce continuity and avoids many of the emotional...