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Operations Planning
Planning Level and Activities
Planning Stages in Operation
Aggregate Planning
Aggregate planning is a big picture approach to production
plan to meet the demand throughout the year or so.
Employment
Graphical Method
Popular technique
Easy to understand and use
Trial-and-error approaches that do
not guarantee an optimal solution
Require only limited computations
Graphical Method
Month Expected Production Demand / Avg. daily
Demand Days day demand
Jan 900 22 41 50
Feb 700 18 39 50
March 800 21 38 50
April 1200 21 57 50
May 1500 22 68 50
June 1100 20 55 50
6,200 124
Graphical Method
Chase Demand
Hiring and Firing people
Aggregate Planning Techniques
Mixed Strategy
Combination of
Overtime, under time, & subcontracting
Part Time employees
Hiring and firing
Inventory
Backordering
Note: When one alternative: Pure Strategy
When two or more are selected: Mixed strategies
Level Production Strategy
It is an aggregate planning in which monthly
production is uniform
Requires no overtime, no change in work force
levels, and no subcontracting
Toyota and Nissan follow this strategy
Finished goods inventory go up or down to
buffer the difference between demand and
production
Level Production Strategy
LEVEL PRODUCTION STRATEGY