Microsoft PowerPoint -
OM_Operations_Planning_2020.pptxAggregate plan Establishes
operations capacity
Master schedule Establishes schedules for
specific products
Corporate strategies and policies
Aggregate demand forecasts
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Demand Forecasts
Supply Plan
planning: It takes time to implement plans
strategic: difficult to predict timing and volume of
demand for individual items.
It can help synchronize flow throughout the
supply chain
It is connected to the budgeting process
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Overtime/slack time/
Total cost of a plan +
Projected levels of
Forecasted demand Utilized time Inventory
https://www.youtube.com/watch?v=morDpfsSHWk
https://www.youtube.com/watch?v=Ah9FZ4Q1qe0
I Level strategy Advantages
Stable output rates and workforce
Disadvantages Greater inventory and backlogs
Increased overtime or idle time
Chase strategy Advantages
Investment in inventory is low
Labor utilization is high
Disadvantages
Cost of adjusting output rates and/or workforce levels
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Overtime
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Demand > Supply Overbooking;
Profit loss
Foregone profit;
Consumer dissatisfaction
II. Matching Supply and Demand for Services
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Promoting OffPeak Demand/
Different sources of demand
Hotel: conventions for business or
professional groups during the offseason.
Differential Pricing
Weekend rates for phone calls.
Summer pricing by utility companies.
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Reservations may benefit consumers by reducing waiting
and guarantee service availability.
Approximately 50% of reservations get cancelled.
Multiple reservations, late arrivals, noshows.
The company may fail to receive any revenue if a customer
cancels the reservation or does not show up.
Solution: Nonrefundable prepayment, overbooking
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Too many walkin patients on Mondays at a health clinic.
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Before Smoothing
After Smoothing
Monday 84 Tuesday 89 Wednesday 124 Thursday 129 Friday 114
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Sharing Capacity
A service manager might consider sharing capacity with
another business to use required, expensive, but underused
resources jointly.
The application of pricing strategies to allocate capacity
among various categories of demand.
The Park Hyatt Hotel has 118 King/Queen rooms.
$159 (low fare) discount fare targeting leisure travelers.
Regular fare is $225 targeting business travelers.
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1. 2.
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Master schedule: The result of
disaggregating an aggregate plan; shows
quantity and timing of specific end items
for a scheduled horizon.
Master Scheduler
Evaluates impact of new orders
Provides delivery dates for orders
Deals with problems
Production delays Revising master schedule
Insufficient capacity
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A 6500 3600 2800 1200
B 4500 3600 2100 1000
A 6500 4400 5600 6600
B 4500 4400 4200 4400
MPS 1 2 3 4 5 6 7 8
A 2400 0 2400 1700 1100 1100 1100 1100
B 0 2400 0 2100 1100 1100 1100 1100
RoughCut Capacity Planning
Available To Promise MPS
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Aggregate Planning
IV. Material Requirements Planning
MRP Inputs: The Master Schedule
Week 1 2 3 4 5 6 7 8 9 10
MPS 150 150
1 Capacity Requirement Planning MRP
2 safety stock
Manufacturing Resource PlanningMRPII
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Enterprise Resource Planning
Next step in an evolution that began with MRP and evolved into MRPII.
Integration of financial, manufacturing, and human resources on a
single system.
One Nestle, One System
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2. Improve system integration.
Problems
1. ERP is an accounting system. It does not do planning.
2. ERP does not support the business process.
3.
The organization could not make necessary changes.
4. ERP project may take one to three years to complete.
5. High initial cost: average $15 million.
6. High cost to maintain: future upgrades and training
Conclusion
MRP does a good job in computing the schedules and
amount of materials required.
MRP has grown to become ERP, a fully integrated,
interactive, realtime systems capable of multisite
global application.
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