Section 8 Aggregate Planning in the Supply Chain .

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Chapter 8 Aggregate Planning in the Supply Chain. Supply Chain Management (3rd Edition). Outline. Role of aggregate planning in a supply chain The aggregate planning problem Aggregate planning strategies Implementing aggregate planning in practice.
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Part 8 Aggregate Planning in the Supply Chain Supply Chain Management (third Edition)

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Outline Role of total arranging in a store network The total arranging issue Aggregate arranging procedures Implementing total arranging by and by

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Role of Aggregate Planning in a Supply Chain Capacity has a cost, lead times are more prominent than zero Aggregate arranging: handle by which an organization decides levels of limit, generation, subcontracting, stock, stockouts, and estimating over a predefined time skyline objective is to boost benefit choices made at an item family (not SKU) level time period of 3 to year and a half by what means can a firm best utilize the offices it has?

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Role of Aggregate Planning in a Supply Chain Specify operational parameters over the time skyline: creation rate workforce additional time machine limit level subcontracting build-up stock close by All store network stages ought to cooperate on a total arrangement that will enhance inventory network execution

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The Aggregate Planning Problem Given the request figure for every period in the arranging skyline, decide the generation level, stock level, and the limit level for every period that expands the association\'s (supply chain\'s) benefit over the arranging skyline Specify the arranging skyline (normally 3-year and a half) Specify the term of every period Specify scratch data required to build up a total arrangement

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Information Needed for an Aggregate Plan Demand gauge in every period Production costs work costs, standard time ($/hr) and extra minutes ($/hr) subcontracting costs ($/hr or $/unit) cost of evolving limit: procuring or cutback ($/laborer) and cost of including or lessening machine limit ($/machine) Labor/machine hours required per unit Inventory holding cost ($/unit/period) Stockout or overabundance cost ($/unit/period) Constraints: restricts on extra minutes, cutbacks, capital accessible, stockouts and excesses

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Outputs of Aggregate Plan Production amount from customary time, additional time, and subcontracted time: used to decide number of specialists and supplier buy levels Inventory held: used to decide what amount of stockroom space and working capital is required Backlog/stockout amount: used to figure out what client benefit levels will be Machine limit increment/diminish: used to figure out whether new creation hardware should be obtained A poor total arrangement can bring about lost deals, lost benefits, abundance stock, or abundance limit

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Aggregate Planning Strategies Trade-off between limit, stock, build-up/lost deals Chase methodology – utilizing limit as the lever Time adaptability from workforce or limit system – utilizing use as the lever Level technique – utilizing stock as the lever Mixed procedure – a blend of one or a greater amount of the initial three methodologies

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Chase Strategy Production rate is synchronized with request by differing machine limit or enlisting and laying off laborers as the request rate shifts However, practically speaking, it is frequently hard to differ limit and workforce without prior warning if cost of differing limit is high Negative impact on workforce confidence Results in low levels of stock Should be utilized when stock holding expenses are high and expenses of changing limit are low

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Time Flexibility Strategy Can be utilized if there is overabundance machine limit Workforce is kept stable, yet the quantity of hours worked is fluctuated after some time to synchronize generation and request Can utilize extra minutes or an adaptable work routine Requires adaptable workforce, yet keeps away from resolve issues of the pursuit methodology Low levels of stock, lower usage Should be utilized when stock holding expenses are high and limit is moderately cheap

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Level Strategy Maintain stable machine limit and workforce levels with a consistent yield rate Shortages and surpluses result in vacillations in stock levels over the long run Inventories that are developed in suspicion of future request or overabundances are extended from high to low request periods Better for specialist assurance Large inventories and overabundances may collect Should be utilized when stock holding and accumulation expenses are generally low

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Aggregate Planning at Red Tomato Tools

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Fundamental Tradeoffs in Aggregate Planning Capacity (normal time, additional time, subcontract) Inventory Backlog/lost deals Basic Strategies Chase methodology Time adaptability from workforce or limit Level technique

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Aggregate Planning

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Aggregate Planning (Define Decision Variables) W t = Workforce estimate for month t , t = 1, ..., 6 H t = Number of representatives contracted toward the start of month t , t = 1, ..., 6 L t = Number of representatives laid off toward the start of month t , t = 1, ..., 6 P t = Production in month t , t = 1, ..., 6 I t = Inventory toward the end of month t , t = 1, ..., 6 S t = Number of units loaded out toward the end of month t , t = 1, ..., 6 C t = Number of units subcontracted for month t , t = 1, ..., 6 O t = Number of extra time hours worked in month t , t = 1, ..., 6

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Aggregate Planning (Define Objective Function)

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Aggregate Planning (Define Constraints Linking Variables) Workforce measure for every month depends on employing and cutbacks

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Aggregate Planning (Constraints) Production for every month can\'t surpass limit

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Aggregate Planning (Constraints) Inventory adjust for every month

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Aggregate Planning (Constraints) Over time for every month

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Scenarios Increase in holding cost (from $2 to $6) Overtime cost drops to $4.1 every hour Increased request variance

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Increased Demand Fluctuation

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Aggregate Planning in Practice Think past the venture to the whole production network Make arranges adaptable on the grounds that conjectures are never right Rerun the total arrangement as new data rises Use total arranging as limit use increments

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Summary of Learning Objectives What sorts of choices are best comprehended by total arranging? What is the significance of total arranging as a production network action? What sorts of data are expected to deliver a total arrangement? What are the essential exchange offs an administrator makes to deliver a total arrangement? How are total arranging issues planned and tackled utilizing Microsoft Excel?

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