9. Planning Steps hierarchy Forecast of aggregate demand for t period Planning horizon Aggregate production Plan : Production and Workforce levels for each period Master Production Schedule : Production levels by item by period Material Requirements Planning : Detailed Time table for production and assembly of Components and subassemblies

17. Aggregate Planning: Example Inventory

19. Aggregate Planning: Example Strategy 1 : Chase the demand by changing work force levels Month Number of Working days Number of Units produced Per worker (Bx.14653) Forecast Net demand Min. # of Worker required (D/C) Initial Calculations Table D C B A

20. Aggregate Planning: Example Total cost = 755(500)+145(1000)+30(80) = 524,900 Month # of Workers # of units per workers # fired # hired Cum. Product. Produc Tion (BxE) Cum. Demand. Inven tory. A B D C F E G H I Aggregate Production/capacity plan

21. Aggregate Planning: Example Min. Number Of Workers required 411 Strategy 2: Constant work force : Keep the work force level constant throughout the planning horizon Month Cumulative net demand Cumulative # of units produced per worker Ratio (B/C) Required workforce for strategy 2

22. Aggregate Planning: Example Total cost = (411-300)(500)+5963(80) = 532,540 Month Production Per worker Monthly Production (Bx411) Cumulative production Cumulative Net demand Inven tory Aggregate Production/capacity plan

23. Are we missing anything?? :P

26. Aggregate Planning: Example Red strategy Blue strategy