Final Cut

Learning Team C Reflection
Robert Copeland, Priscilla Umeda, and Dolores Lane
July 15, 2013
Professor William Wider

Aggregate planning is a transitional planning method used to establish the necessary resource capacity such as labor, raw materials, and production facilities, an organization will need to meet their expected demand.   The aggregate method of planning is developed for a group of products, and an individual product. The intermediate planning range can imply a period of six-12 months. In aggregate planning one has to determine demand, and capabilities for each period, which is based on the organizations current forecasting techniques. The capabilities are determined by using current available resources, including regular time, overtime, and subcontracting. Also by determining the significant company policies, and establish unit cost bases on applicable sources. Alternative plans have to be developed and the cost has to be calculated for each one. The objective of aggregate planning is to develop a realistic production plan on an aggregate level which will ensure the organizations goals and customer needs at the lowest total cost. Another goal is to maximize customer service and the utilization of plans and equipment. Therefore, minimizing inventory cost, changes in the workforce and production levels. One strategy, which can be chosen in aggregate planning, is the chase strategy. The chase strategy assists companies in matching production, and demand by hiring and firing employees as necessary to manage output. When work demand increases, production must increase, as a result, additional employees are hired to meet the demand. However, when demand decreases production is reduced, therefore, causing layoff, and firing.  


The advantages of chase strategy cannot be overemphasized. Automobile company such as Ford is a great example of company that use chase strategy. This is due...