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itleStudAssignment 36256 04102025041135823

The document outlines an aggregate planning model for a garments company, focusing on demand forecasting, production planning, inventory management, workforce planning, and capacity planning. It discusses various aggregate planning strategies, including chase, level, hybrid, subcontracting, and demand management. Additionally, it calculates the average monthly demand and the total cost of workforce variation, resulting in a total cost of Rs. 382,000.

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11 views3 pages

itleStudAssignment 36256 04102025041135823

The document outlines an aggregate planning model for a garments company, focusing on demand forecasting, production planning, inventory management, workforce planning, and capacity planning. It discusses various aggregate planning strategies, including chase, level, hybrid, subcontracting, and demand management. Additionally, it calculates the average monthly demand and the total cost of workforce variation, resulting in a total cost of Rs. 382,000.

Uploaded by

aditya.24bban0247
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Mahirudra Singh Rathore (Roll No: 24BBAN0198).

Assignment: Aggregate Planning for a Garments Company

1. Aggregate Plan Model for Garments Company:

To increase production in the fiscal year, a garments company can use the following aggregate plan
model:

1. Demand Forecasting:

o Use historical data, market trends, and sales projections to forecast the demand for
garments.

o Monthly demand for the next 12 months is projected based on the forecast.

2. Production Plan:

o Develop a production plan that meets the forecasted demand while considering
capacity, inventory levels, and workforce availability.

3. Inventory Management:

o Determine the optimal inventory levels to balance the cost of holding inventory with
the need to meet customer demand promptly.

4. Workforce Planning:

o Plan for hiring, training, and managing the workforce to meet production
requirements.

o Consideration of overtime, part-time workers, and subcontracting to handle


fluctuations in demand.

5. Capacity Planning:

o Evaluate the production capacity and identify any potential bottlenecks.

o Plan for equipment maintenance, upgrades, and potential expansion of production


facilities.

2. Various Strategies of Aggregate Planning:

There are several strategies for aggregate planning:

1. Chase Strategy:

o Adjust the workforce and production rates to match the demand.

o Minimize inventory levels and carry costs.

2. Level Strategy:

o Maintain a constant production rate and workforce level.

o Use inventory to absorb fluctuations in demand.

o Stable workforce and production schedule.


3. Hybrid Strategy:

o Combine elements of both chase and level strategies.

o Adjust production rates and workforce levels moderately to balance cost and
flexibility.

4. Subcontracting and Outsourcing:

o Use external vendors to handle excess demand.

o Reduces the need for permanent workforce changes.

5. Demand Management:

o Influence demand through marketing, promotions, and pricing strategies.

o Align demand with production capabilities.

3. Examining the Strategy of Producing as per the Average Demand (Manna Associates):

To produce as per the average demand, calculate the average monthly demand:

Average Monthly Demand=Total Annual Demand12\text{Average Monthly Demand} =


\frac{\text{Total Annual Demand}}{12}

Total Annual Demand=360+248+320+440+528+400+320+240+376+520+560+488=5200 (in 000’s)\tex


t{Total Annual Demand} = 360 + 248 + 320 + 440 + 528 + 400 + 320 + 240 + 376 + 520 + 560 + 488 =
5200 \text{ (in 000's)}

Average Monthly Demand=520012=433.33 (in 000’s)\text{Average Monthly Demand} =


\frac{5200}{12} = 433.33 \text{ (in 000's)}

By producing as per the average demand, the company can maintain a steady production level of
433,330 units per month, smoothing out the peaks and valleys of demand.

4. Calculating the Total Cost of Workforce Variation:

Month Workers Required Workers Beginning Hiring (Cost) Layoff (Cost)

January 11 10 1 (7000) 0 (0)

February 5 9 0 (0) 4 (16000)

March 8 7 1 (7000) 0 (0)

April 23 8 15 (105000) 0 (0)

May 20 10 10 (70000) 0 (0)

June 12 21 0 (0) 9 (36000)

July 5 11 0 (0) 6 (24000)

August 9 5 4 (28000) 0 (0)


Month Workers Required Workers Beginning Hiring (Cost) Layoff (Cost)

September 11 12 0 (0) 1 (4000)

October 21 25 0 (0) 4 (16000)

November 20 25 0 (0) 5 (20000)

December 21 14 7 (49000) 0 (0)

Total Cost=Total Hiring Cost+Total Layoff Cost\text{Total Cost} = \text{Total Hiring Cost} + \text{Total
Layoff Cost}

Total Hiring Cost=7000+7000+105000+70000+28000+49000=266000\text{Total Hiring Cost} = 7000 +


7000 + 105000 + 70000 + 28000 + 49000 = 266000

Total Layoff Cost=16000+36000+24000+4000+16000+20000=116000\text{Total Layoff Cost} = 16000


+ 36000 + 24000 + 4000 + 16000 + 20000 = 116000

Total Cost=266000+116000=382000\text{Total Cost} = 266000 + 116000 = 382000

The total cost of the plan is Rs. 382,000.00.

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