Upload
pelly-sianova
View
20.524
Download
4
Tags:
Embed Size (px)
DESCRIPTION
Operations Management by R. Dan Reid & Nada R. Sanders3rd Edition © Wiley 2007
Citation preview
© Wiley 2007
Chapter 13 – Aggregate Planning
Operations Managementby
R. Dan Reid & Nada R. Sanders3rd Edition © Wiley 2007
PowerPoint Presentation by R.B. Clough – UNHM. E. Henrie - UAA
© Wiley 2007
The Role of Aggregate Planning Integral to part of the business
planning process Supports the strategic plan Also known as the production plan Identifies resources required for
operations for the next 6 -18 months Details the aggregate production
rate and size of work force required
© Wiley 2007
The Role of the Aggregate Plan
© Wiley 2007
Planning Links to MPS
© Wiley 2007
Types of Aggregate Plans Level Aggregate Plans
Maintains a constant workforce Sets capacity to accommodate average demand Often used for make-to-stock products like appliances Disadvantage- builds inventory and/or uses back orders
Chase Aggregate Plans Produces exactly what is needed each period Sets labor/equipment capacity to satisfy period demands Disadvantage- constantly changing short term capacity
© Wiley 2007
Types of Aggregate Plans (Cont.)
Hybrid Aggregate Plans Uses a combination of options Options should be limited to facilitate execution May use a level workforce with overtime & temps May allow inventory buildup and some backordering May use short term sourcing Best way to develop a hybrid plan is by Linear Programming
or Integer Linear Programming, see notes given in class andhttp://bcs.wiley.com/he-bcs/Books?action=mininav&bcsId=3598&itemId=0471794481&assetId=112492&resourceId=10280&newwindow=true
© Wiley 2007
Aggregate Planning Options
Demand based options Reactive: uses finished goods inventories and backorders for fluctuations Proactive: shifts the demand patterns to minimize
fluctuations e.g. early bird dinner prices at a restaurant Capacity based options
Changes output capacity to meet demand Uses overtime, under time, subcontracting, hiring,
firing, and part-timers – cost and operational implications
© Wiley 2007
Developing the Aggregate Plan
Step 1- Choose strategy: level, chase, or Hybrid Step 2- Determine the aggregate production rate Step 3- Calculate the size of the workforce Step 4- Test the plan as follows:
Calculate Inventory, expected hiring/firing, overtime needs Calculate total cost of plan
Step 5- Evaluate performance: cost, service, human resources, and operations
© Wiley 2007
Aggregate Planning Bottom Line
The Aggregate plan must balance several perspectives
Costs are important but so are: Customer service Operational effectiveness Workforce morale
A successful AP considers each of these factors
© Wiley 2007
Master Production Scheduling
Master production schedule (MPS) is the anticipated build schedule
MPS is often stated in produce or service specifications rather than dollars
MPS is often built, managed, reviewed and maintained by the master scheduler
© Wiley 2007
Planning Links to MPS
© Wiley 2007
Role of the MPS
Aggregate plan: Specifies the resources available (e.g.:
regular workforce, overtime, subcontracting, allowable inventory levels & shortages)
Master production schedule: Specifies the number & when to produce
each end item (the anticipated build schedule)
Disaggregates the aggregate plan
© Wiley 2007
Objectives of Master Schedule The Master Scheduler must:
Maintain the desired customer service level Utilize resources efficiently Maintain desired inventory levels
The Master Schedule must: Satisfy customer demand Not exceed Operation’s capacity Work within the constraints of the
Aggregate Plan
© Wiley 2007
MPS as a Basis of Communication MPS is a basis for communication between
operations and other functional areas Demand management and master
scheduler is communication is ongoing to incorporate Forecasts, order-entry, order-promising, and
physical distribution activities Authorized MPS is critical input to the
material requirements planning (MRP)
© Wiley 2007
Developing an MPS The Master Scheduler:
Develops a proposed MPS Checks the schedule for feasibility with available
capacity Modifies as needed Authorizes the MPS
Consider the following example: Make-to-stock environment with fixed orders of 125
units There are 110 in inventory to start When are new order quantities needed to
satisfy the forecasted demand?
© Wiley 2007
The MPS Record
Projected Available = beginning inventory + MPS shipments - forecasted demand
The MPS row shows when replenishment shipments need to arrive to avoid a stock out (negative projected available)
Week BI 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Projected available 110 60 10 -40
MPS
Week BI 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Projected available 110 60 10 85 35 -40
MPS 125
© Wiley 2007
Revised and Completed MPS Record
Week BI 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Projected available 110 60 10 85 35 85 10 -65
MPS 125 125
Week BI 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 50 50 50 50 75 75 75 75 50 50 50 50
Projected available 110 60 10 85 35 85 10 60 110 60 10 85 35
MPS 125 125 125 125 125
© Wiley 2007
Evaluating the MPS Rough-cut capacity planning:
An estimate of the plan’s feasibility Given the demonstrated capacity of critical
resources (e.g.: direct labor & machine time), have we overloaded the system?
Customer service issues: Does “available-to-promise” inventory
satisfy customer orders? If not, can future MPS quantities be pulled in to satisfy new orders?
© Wiley 2007
Stabilizing the MPS
© Wiley 2007
Aggregate Planning Across the Organization Aggregate planning, MPS, and rough-cut
capacity affection functional areas throughout the organization Accounting is affected because aggregate
plan details the resources needed by operations
Marketing as the aggregate plan supports the marketing plan
Information systems maintains the databases that support demand forecasts and other such information
© Wiley 2007
Chapter 13 Highlights Planning begins with the development of the strategic
business plan that provides your company’s direction and objectives for the next two to ten years.
Sales and operations planning integrates plans from the other functional areas and regularly evaluates company performance.
The level aggregate plan maintains the same size workforce and produces the same output each period. Inventories and backorders absorb fluctuations in demand. The chase aggregate plan changes the capacity each period to match the demand
Demand patterns can be smoothed through pricing incentives, reduced prices for out-of-season purchases, or nonprime service times.
© Wiley 2007
Chapter 13 Highlights (continued)
The difference in aggregate planning for companies that do not provide a tangible product is that the option to use inventories is not available
The MPS shows how the resources authorized by the AP will be used to satisfy the organizational objectives. The MPS specifies the products to be built in each time period. MPS is checked for feasibility using a rough-cut capacity planning technique.
The objectives of master scheduling are to satisfy customer service objectives, use resources effectively, and minimize costs. An MPS is developed by looking at individual MPS records and calculating when replenishment quantities are needed. The MPS records are summed together to show the total proposed workload.
© Wiley 2007
Chapter 13 Highlights (continued)
Available-to-promise logic is used when promising order delivery dates to customers, ATP logic allows the company to make viable delivery promises
Time fence policies stabilize the MPS. The demand time fence and the planning time fence divide the MPS into three portions: frozen, slushy, and liquid.
© Wiley 2007
The End Copyright © 2007 John Wiley & Sons, Inc. All rights
reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United State Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
© Wiley 2007
Parameters: found in or computed from the data
Decision variables: unknowns to be determined
Objective function: the bottom line
Constraints: Satisfy demands and state relationships among variables
Single Product model here; can be generalized
Aggregate Production Planning Extra Credit: Linear Programming
Formulation
© Wiley 2007
dt = amount of product demanded in period t
pt = productivity per worker in period t
Lt = unit labor cost per worker in period t
ht = unit hiring cost per worker in period t
ft = unit firing cost per worker in period t
Parameters: find these in the data!
© Wiley 2007
ct = inventory holding cost per unit per period in period t
at = backorder cost per item per period in period t
Parameters: find these in the data!
© Wiley 2007
wt = number of workers employed in period t
ut = number of workers hired between periods t-1 and t
vt = number of workers fired between periods t-1 and t
it = amount of product in inventory at the end of period t
bt = amount backordered at the end of period t
Decision Variables: find values by solving the
model
© Wiley 2007
io = initial inventory level
wo = initial workforce level
bo = initial backorder, i.e., left over from previous period.
Initial values: “fixed variables”; find in
data
© Wiley 2007
The LP ModelMinimize t (Ltwt + htut + ftvt + ctit + atbt)
s.t.
ut - vt = wt – wt-1 for each period t : workforce change
ptwt + it-1 - it + bt – bt-1 = dt for each period t: demand balance
iT==0, bT = 0 for last period T; closing out
wt, ut, vt, it, bt 0 for each time period t: nonnegativity
© Wiley 2007
The LP model for the exampleMinimize 1280w1+1280w2 +…+
500u1+500u2 +…+ 1000v1+1000v2+…+10 i1 + 10 i2 +…+ 100 b1 + 100 b2+…
s.t.u1 – v1 = w1 – 210 (period 1) …26.67w1 + io – i1 + b1 – bo = 6000 (period 1)
26.67w1 + io – i1 + b1 – bo = 4800 (period 2)…All variables nonnegative
© Wiley 2007
Sec 03: June 5, 2008
Ch 16: Project Management Video Case: PM at NASA Break Aggregate Planning LP Model (extra-
credit) Review for final exam