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Aggregate Planning

Aggregate planning involves determining production levels and workforce sizes over the intermediate term (3 months to 1 year) to meet demand at the lowest cost while staying within financial and production constraints. There are two approaches - top-down creates one overall plan by consolidating all products, while bottom-up develops sub-plans for product families then combines them into the aggregate plan showing total output and capacity needs. The objective is to create feasible and optimal plans that use resources wisely and keep costs low.

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753 views3 pages

Aggregate Planning

Aggregate planning involves determining production levels and workforce sizes over the intermediate term (3 months to 1 year) to meet demand at the lowest cost while staying within financial and production constraints. There are two approaches - top-down creates one overall plan by consolidating all products, while bottom-up develops sub-plans for product families then combines them into the aggregate plan showing total output and capacity needs. The objective is to create feasible and optimal plans that use resources wisely and keep costs low.

Uploaded by

Aditya
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Aggregate planning:-

aggregate planning involves the


best quality to produce during time periods in
the intermediated- range horizon (often 3
months to 1 year) and planning the lowest
cost method of providing the adjustable
capacity to accommodate the production
requirements. For manufacturing operations
aggregate planning involves planning work
force size , production rate (work hours per
week) and inventory level.
OBJECTIVES
1. To develop plans that are:

a) Feasible: the plans should provide for their portion of


demand that firm intends to meet and should be within
the financial and physical capacity of the firm.
b) Optimal: the firm should aim for plans, which will ensure
that resources are used as wisely as possible and cost
kept as low as possible.
• To increase the range of alternatives of capacity use
that can be considered by the management of the firm.
APPROACHES TO AGGREGATE PLANNING

An aggregate planning takes into consideration the overall


level of output and the capacity that is required to
produce it. There are two basic approaches to
estimating the capacity that will be required to produce
an aggregations or grouping of a company’s products.
1. Top down approach: aggregate planning involves
development of the entire plan by working only at
highest level of consolidates the products into an
average product and then develops one overall plan.
2. A bottom-up approach: involves development of
plans for major product families at some lower level
within the product line. These sub-plans are then
consolidated to arrive at the aggregate plan which
gives the overall output and the capacity required to
produce it

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