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2 chapter 14 aggregate sales and operations planning mcgraw hill irwin 2006 the mcgraw hill companies inc all rights reserved 3 objectives sales and operations planning the aggregate operations plan ...

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                                                         2
                 Chapter 14
      Aggregate Sales and 
       Operations Planning
   McGraw-Hill/Irwin           © 2006 The McGraw-Hill Companies, Inc., All 
                               Rights Reserved.
                                                         3
        OBJECTIVES 
        Sales and Operations Planning
        The Aggregate Operations Plan 
        Examples: Chase and Level 
          strategies
   McGraw-Hill/Irwin           © 2006 The McGraw-Hill Companies, Inc., All 
                               Rights Reserved.
                                                                            4
                   Exhibit 14.1
                   Exhibit 14.1            Process planning
     Long
     range                             Strategic capacity planning
    Intermediate Forecasting 
    range          & demand          Sales and operations (aggregate) planning
                   management
                                    Sales plan     Aggregate operations plan
     Manufacturing
                                                                   Services
                      Master scheduling
                Material requirements planning
                                                      Weekly workforce and
                       Order scheduling                customer scheduling
     Short
     range                             Daily workforce and customer scheduling
   McGraw-Hill/Irwin                     © 2006 The McGraw-Hill Companies, Inc., All 
                                         Rights Reserved.
                                                                        5
         Sales and Operations Planning 
                              Activities
           Long-range planning
              – Greater than one year planning horizon
              – Usually performed in annual increments
           Medium-range planning
              – Six to eighteen months 
              – Usually with weekly, monthly or quarterly 
                increments 
           Short-range planning
              – One day to less than six months
              – Usually with weekly or daily increments 
   McGraw-Hill/Irwin                   © 2006 The McGraw-Hill Companies, Inc., All 
                                       Rights Reserved.
                                                         6
    The Aggregate Operations Plan
         Main purpose: Specify the optimal 
          combination of
           – production rate (units completed per 
            unit of time)
           – workforce level (number of workers)
           – inventory on hand (inventory carried 
            from previous period)
         Product group or broad category 
          (Aggregation)
         This planning is done over an 
          intermediate-range planning period of 3 
          to18 months 
   McGraw-Hill/Irwin           © 2006 The McGraw-Hill Companies, Inc., All 
                               Rights Reserved.
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...Chapter aggregate sales and operations planning mcgraw hill irwin the companies inc all rights reserved objectives plan examples chase level strategies exhibit process long range strategic capacity intermediate forecasting demand management manufacturing services master scheduling material requirements weekly workforce order customer short daily activities greater than one year horizon usually performed in annual increments medium six to eighteen months with monthly or quarterly day less main purpose specify optimal combination of production rate units completed per unit time number workers inventory on hand carried from previous period product group broad category aggregation this is done over an...

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