Page 259 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes 13.3.1 Various Steps Involved in Aggregate Planning

1. The first step involved is the forecast of resource for a reasonable period (normally up to
a year’s time).

2. The state of the system at the end of last period.
3. Once these two factors are decided, the decision for the upcoming period about the size of
the workforce and production rate can be known.
4. Also, the decision made may call for having or laying of personnel thereby expanding or
contracting the effective capacity of the productive system.
5. Special techniques available for Aggregate Planning are:
(a) Graphical Method

(b) Linear Decision Rule (LDR)
Objectives of Aggregate Planning are:
1. To make use of the available facilities and resources to ensure their optimum use.

2. Aggregate Planning increases the range of alterations for capacity use through various
techniques viz., hiring of additive manpower or laying out of personnel thereby fixing
the size of the workforce and the production rate.
3. Inventories for work-in-progress and finished goods is made during the loan demand so
as to use the same to meet the peak demand.
4. More time is devoted to produce more from the same machinery capacity through properly
employing the sequencing and scheduling techniques.
5. The following variables are studied under the Aggregate Planning:
(a) Production Rate

(b) Labour Employment
(c) Inventories
(d) Sub-contracting (if permissible)

If the production rate and labour employment are fixed, the Inventories & Sub-Contracting can
be derived therefrom. However, Aggregate Planning is not long term planning.

Box 13.1: Conversion of an Aggregate Plan into a Master Schedule

Month Apr. May Jun. Jul. Aug. Sept.
UNITS 4000 3000 5000 5000 6000 3000
REQD.
MONTH Oct Nov Dec Jan Feb Mar

UNITS 3000 4000 5000 6000 5000 4000
REQD.

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