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    Operations Management: Course Instructor: Mansoor Qureshi

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    ZUBAIR KHALID
    The document discusses demand planning and aggregate operations management. It defines demand as connecting all levels of a supply chain or business process. It then outlines the planning sequence from economic conditions to business plans to aggregate demand forecasts. It discusses long, intermediate, and short-range planning levels and inputs and outputs to aggregate planning like resources, costs, demand forecasts, and total planned costs. Finally, it explains how an aggregate plan is disaggregated into a master production schedule.

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    Operations Management: Course Instructor: Mansoor Qureshi

    Uploaded by

    ZUBAIR KHALID
    20 views18 pages
    The document discusses demand planning and aggregate operations management. It defines demand as connecting all levels of a supply chain or business process. It then outlines the planning sequence from economic conditions to business plans to aggregate demand forecasts. It discusses long, intermediate, and short-range planning levels and inputs and outputs to aggregate planning like resources, costs, demand forecasts, and total planned costs. Finally, it explains how an aggregate plan is disaggregated into a master production schedule.

    Original Description:

    Operational Managements sub topic

    Original Title

    Demand Planning

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    The document discusses demand planning and aggregate operations management. It defines demand as connecting all levels of a supply chain or business process. It then outlines the planning sequence from economic conditions to business plans to aggregate demand forecasts. It discusses long, intermediate, and short-range planning levels and inputs and outputs to aggregate planning like resources, costs, demand forecasts, and total planned costs. Finally, it explains how an aggregate plan is disaggregated into a master production schedule.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    20 views18 pages

    Operations Management: Course Instructor: Mansoor Qureshi

    Uploaded by

    ZUBAIR KHALID
    The document discusses demand planning and aggregate operations management. It defines demand as connecting all levels of a supply chain or business process. It then outlines the planning sequence from economic conditions to business plans to aggregate demand forecasts. It discusses long, intermediate, and short-range planning levels and inputs and outputs to aggregate planning like resources, costs, demand forecasts, and total planned costs. Finally, it explains how an aggregate plan is disaggregated into a master production schedule.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    Operations

    Management
    Topic – Demand Planning

    Course Instructor:
    Mansoor Qureshi
    Introduction
    • Where does the real business activity start from?

    Consumption of Goods & Services

    • What does an organization need to run its business


    activities?
    A Plan

    • What is the things that has connected us all in a business


    process / supply chain?

    It is DEMAND at all levels


    Material / Product Flow
    Planning Sequence

    Economic,
    Corporate competitive, Aggregate
    strategies and political demand
    and policies conditions forecasts

    Establishes operations
    Business Plan
    and capacity strategies

    Establishes
    Aggregate plan
    operations capacity

    Master schedule Establishes schedules


    for specific products
    Overview of Planning Levels
    • Long-range plans
    – Long term capacity
    – Location / layout
    • Intermediate plans (General levels)
    – Employment
    – Output
    • Short-range plans (Detailed plans)
    – Machine loading
    – Job assignments
    Aggregate Planning Inputs

    • Resources • Costs
    – Workforce – Inventory carrying
    – Facilities – Back orders
    • Demand forecast – Hiring/firing
    • Policies – Overtime
    – Subcontracting – Inventory changes
    – Overtime – subcontracting
    – Inventory levels
    – Back orders
    Aggregate Planning Outputs

    • Total cost of a plan

    • Projected levels of inventory


    – Inventory
    – Output
    – Employment
    – Subcontracting
    – Backordering
    Aggregate Planning Strategies

    • Maintain a level workforce


    • Maintain a steady output rate
    • Match demand period by period
    • Use a combination of decision
    variables
    Basic Strategies

    • Level capacity strategy:


    – Maintaining a steady rate
    of regular-time output
    while meeting variations
    in demand by a
    combination of options.
    • Chase demand strategy:
    – Matching capacity to
    demand; the planned
    output for a period is set
    at the expected demand
    for that period.
    Level Approach Chase Approach
    • Advantages • Advantages
    – Stable output rates and – Investment in
    workforce inventory is low
    – Labor utilization in
    • Disadvantages high
    – Greater inventory costs • Disadvantages
    – Increased overtime and – The cost of
    idle time adjusting output
    – Resource utilizations rates and/or
    vary over time workforce levels
    Techniques for Aggregate Planning

    1. Determine demand for each period


    2. Determine capacities for each period
    3. Identify policies that are pertinent
    4. Determine units costs
    5. Develop alternative plans and costs
    6. Select the best plan that satisfies objectives.
    Otherwise return to step 5.
    Aggregate Planning in Services
    • Services occur when they are rendered
    • Demand for service can be difficult to
    predict
    • Capacity availability can be difficult to
    predict
    • Labor flexibility can be an advantage in
    services
    Aggregate Plan to Master Schedule

    Aggregate
    Planning

    Disaggregation

    Master
    Schedule
    Disaggregating the Aggregate Plan

    • Master schedule: The result of


    disaggregating an aggregate plan; shows
    quantity and timing of specific end items for
    a scheduled horizon.
    • Rough-cut capacity planning: Approximate
    balancing of capacity and demand to test the
    feasibility of a master schedule.
    Master Scheduling Master Scheduler
    Evaluates impact of new
    Determines quantities orders
    needed to meet Provides delivery dates
    demand for orders

    Interfaces with Deals with problems


    • Marketing • Production delays
    • Capacity planning • Revising master
    • Production planning schedule
    • Distribution planning • Insufficient capacity
    Master Scheduling Process
    Inputs Outputs

    Beginning inventory Projected inventory

    Forecast Master production schedule


    Master
    Scheduling

    Customer orders Uncommitted inventory

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