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Aggregate Planning - Essay

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PRODUCTION MANAGEMENT ASSIGNMENT
Topic:- Aggregate Planning

Submitted by:- ANJANA KRISHNAN FM-673

AGGREGATE PLANNING:
Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization. The aggregate plan generally contains targeted sales forecasts, production levels, inventory levels, and customer backlogs. This schedule is intended to satisfy the demand forecast at a minimum cost. Properly done, …show more content…

This could result in a considerable amount of hiring, firing or laying off of employees; insecure and unhappy employees; increased inventory carrying costs; problems with labour unions; and erratic utilization of plant and equipment. It also implies a great deal of flexibility on the firm 's part. The major advantage of a chase strategy is that it allows inventory to be held to the lowest level possible, and for some firms this is a considerable savings. Most firms embracing the just-in-time production concept utilize a chase strategy approach to aggregate planning.
Most firms find it advantageous to utilize a combination of the level and chase strategy. A combination strategy (sometimes called a hybrid or mixed strategy) can be found to better meet organizational goals and policies and achieve lower costs than either of the pure strategies used independently.

TECHNIQUES FOR AGGREGATE PLANNING
Techniques for aggregate planning range from informal trial-and-error approaches, which usually utilize simple tables or graphs, to more formalized and advanced mathematical techniques. William Stevenson 's textbook Production/Operations Management contains an informal but useful trial-and-error process for aggregate planning presented in outline form. This general procedure consists of the following steps: 1. Determine demand for each period. 2. Determine capacity for each period. This capacity should match demand, which

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