1 aggregate planning u this chapter explores: –an overview of operations planning techniques...
TRANSCRIPT
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Aggregate Planning This Chapter explores:
– An overview of operations planning techniques
– The hierarchical planning process
– Aggregate production planning
– Production planning strategies
– Applications: pure and mixed strategies
– Master Production Scheduling
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Operations Planning Overview Long-range planning
– Greater than one year planning horizon
Intermediate-range planning– Six to nine months
Short-range planning– One day to less than six months
1 year
6 months
1 week
Process Planning
Strategic Capacity Planning
Aggregate Planning
Master Production Scheduling
Material Requirements Planning
Order Scheduling Weekly Workforce &Customer Scheduling
Daily Workforce &Customer Scheduling
LongRange
MediumRange
ShortRange
Manufacturing Services
Major Operations Planing Activities
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Chapter 7: Schedule Management
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Some Definitions Process planning is selecting specific processes and
technologies to produce a product or service. Strategic capacity planning is the determination of the
long-term capabilities of the system. Aggregate planning involves translating long-term
forecasted demand into specific production rates and the corresponding labor requirements for the intermediate term
AggregatePlanning
Long-termdemand
Production rates
Laborrequirements
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Hierarchical Production Planning
Allocatesproduction
among plants
Annual demand byitem and by region
Determinesseasonal plan by
product type
Monthly demandfor 15 months by
product type
Monthly demandfor 5 months by
item
Determines monthlyitem production
schedules
Decision Process Forecasts neededDecision Level
Corporate
Plant manager
Shopsuperintendent
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Aggregate Production Planning Goal: Specify the optimal combination of
– production rate (units/time)– workforce level (how many workers?)– inventory on hand (unsold product from previous runs)
**the three items above are the basic controllable variables for production planning
Product group or broad category (Aggregation)
Medium-Range: 6-18 months
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Example: Factors Complicating Aggregate Planning at Henry Ford Clinic
High degree of demand variability– average number of occupied beds in 1991 was
770– in one 8-week period an average of 861 beds was
occupied– in another 8-week period an average of 660 beds
were occupied– number of beds occupied could change by as
may as 146 beds in less than two weeks
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Complicating Factors continued
Large penalty for not being able to admit HMO patients– lost revenue
– must pay other hospital for patient’s stay
– a simple obstetrics case cost $5,000
Tight labor market for RNs– 12 to 16 weeks to recruit and train nurses at cost of $7,600
Cost of 8-bed modules exceeds $35,000/ month
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Importance of Aggregate Planning
Without sufficiently long-term view may make short-term decisions that hurt the organization in the long-term
For example, shortly after Henry Ford Hospital reduced staff, it determined the staff was needed
New staff was recruited Both staff reduction and recruiting costs incurred
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Extremely Difficult Decision
Demand can shift by more than 16% in a two-week period
Takes 12 - 16 weeks and costs $7,600 a piece to recruit new nurses
By time staff hired, demand may have shifted again
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Extremely Difficult Decision continued
If don’t have enough staff, cost $5,000 per patient turned away (simple cases)
Cost of one idle 8-bed module is $35,000/month or $420,000/year
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The Aggregate Plan
Approximate schedule of overall operations that will satisfy demand forecast at minimum cost
Planning horizon often a year or more and broken into monthly or quarterly periods
Purpose is to minimize short-sighted effects Work with aggregate units and resources
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The Aggregate Plan continued
Equivalent units Relevant costs
– hiring and layoff costs– inventory and backorder costs– wages and overtime charges– subcontracting costs
Major cost categories are: production costs (direct, fixed and variable); production changes (hiring, firing, training); inventory holding costs; backlog costs.
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The Production Plan
Result of managerial iteration and changes to aggregate plan
Often disaggregated one level into major output groups: E.G.– Aggregate Plan: number of automobiles to be
produced in each of the upcoming 12 months– Production Plan: number of compacts, mid-size,
full-size, light trucks, and minivans to produce in each of the upcoming 12 months
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Aggregate Planning Example
Keepdry, a small manufacturing company (200 employees), produces umbrellas. The company, founded in 1991 produces the following three product lines: 1) the Executive Line, 2) the Durable Line and 3) the Compact line shown in the following figure.
Executive Line Durable Line Compact Line ....
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Aggregate Demand(Executive Line)
0
2000
4000
6000
8000
10000
J an Feb Mar Apr May J un
45005500
7000
10000
8000
6000
Number of working days:Jan 22Feb 19Mar 21Apr 21May 22Jun 20
....
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Aggregate Planning: Some Key Strategies for Meeting Demand – Pure Plans
Chase
Stable Workforce--Variable Work Hours
Level ....
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Cost Information
Materials $5/unitHolding costs $1/unit per monthMarginal cost of stockout $1.25/unit per monthHiring and training cost $200/workerLayoff costs $250/workerLabor hours required .15 hrs/unitStraight time labor cost $8/hourBeginning inventory 250 units
....
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Costs of Production PlansCosts of four plans will be considered with the following assumptions:
Plan 1: Exact production; vary workforce
Plan 2: Constant workforce; vary inventory
Plan 3: Constant low workforce; subcontract
Plan 4: Constant workforce; overtime
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Determining Straight Labor Costs and Output
Work Hrs/worker Units per StraightDays/mo per mo. Worker Cost/worker
J an 22 176 1,173 $1,408Feb 19 152 1,013 1,216Mar 21 168 1,120 1,344Apr 21 168 1,120 1,344
May 22 176 1,173 1,408J un 20 160 1,066 1,280
....
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Chase Strategy(Hiring & Firing)
Month Demand Beginning Prod. Workers # Hired # Fired Total Units EndingInventory Reqmt Required Workforce Produced Inventory
J an 4500 250 4250 3.62 0 3 4 4692 442
Work Hrs/worker Units perDays/mo per mo. Worker
J an 22 176 1,173
Beginning workforce level: 7 employees
....
4250 / 1173 (i.e. normal production rate per worker)
Month Demand Beginning Prod. Workers # Hired # Fired Total Units EndingInventory Reqmt Required Workforce Produced Inventory
J an 4500 250 4250 3.62 0 3 4 4692 442Feb 5500 442 5058 4.99 1 0 5 5065 7
Work Hrs/worker Units perDays/mo per mo. Worker
J an 22 176 1,173Feb 19 152 1,013
....
Month Demand Beginning Prod. Workers # Hired # Fired Total Units EndingInventory Reqmt Required Workforce Produced Inventory
J an 4500 250 4250 3.62 0 3 4 4692 442Feb 5500 442 5058 4.99 1 0 5 5065 7Mar 7000 7 6993 6.24 2 0 7 7840 847
Work Hrs/worker Units perDays/mo per mo. Worker
J an 22 176 1,173Feb 19 152 1,013Mar 21 168 1,120
....
Month Demand Beginning Prod. Workers # Hired # Fired Total Units EndingInventory Reqmt Required Workforce Produced Inventory
J an 4500 250 4250 3.62 0 3 4 4692 442Feb 5500 442 5058 4.99 1 0 5 5065 7Mar 7000 7 6993 6.24 2 0 7 7840 847Apr 10000 847 9153 8.17 2 0 9 10080 927May 8000 927 7073 6.03 0 2 7 8211 1138J un 6000 1138 4862 4.56 0 2 5 5330 468
Month Material Straight Hire Fire Holding TotalCost Labor Cost Cost Cost Cost
J an $23,460 $5,632 $0 $750 $442 $30,284
Materials $5/unitHolding costs $1/unit per mo.Marginal cost of stockout $4/unit per mo.Hiring and training cost $200/workerLayoff costs $250/workerLabor hours required .15 hrs/unitStraight time labor cost $8/hourBeginning inventory 250 unitsBeginning workforce level 7 employees
StraightCost/worker
J an 1408Feb 1216Mar 1344Apr 1344May 1408J un 1280
....
Month Demand Beginning Prod. Workers # Hired # Fired Total Units EndingInventory Reqmt Required Workforce Produced Inventory
J an 4500 250 4250 3.62 0 3 4 4692 442Feb 5500 442 5058 4.99 1 0 5 5065 7Mar 7000 7 6993 6.24 2 0 7 7840 847Apr 10000 847 9153 8.17 2 0 9 10080 927May 8000 927 7073 6.03 0 2 7 8211 1138J un 6000 1138 4862 4.56 0 2 5 5330 468
Month Material Straight Hire Fire Holding TotalCost Labor Cost Cost Cost Cost
J an $23,460 $5,632 $0 $750 $442 $30,284Feb 25,325 6,080 200 0 7 31,612Mar 39,200 9,408 400 0 847 49,855Apr 50,400 12,096 400 0 927 63,823May 41,055 9,856 0 500 1,138 52,549J un 26,650 6,400 0 500 468 34,018
$262,141
....
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Level Production(Surplus and Shortage Allowed)
Beginning workforce level: 6 employees
Month Demand Beginning Prod. Units EndingInventory Reqmt Workers Produced Backlog Surplus Inventory
J an 4500 250 4250 6 7038 0 2788 2788
Work Hrs/worker Units perDays/mo per mo. Worker
J an 22 176 1,173
....
Month Demand Beginning Prod. Units EndingInventory Reqmt Workers Produced Backlog Surplus Inventory
J an 4500 250 4250 6 7038 0 2788 2788Feb 5500 2788 2712 6 6078 0 3366 3366
Work Hrs/worker Units perDays/mo per mo. Worker
J an 22 176 1,173Feb 19 152 1,013
....
Month Demand Beginning Prod. Units EndingInventory Reqmt Workers Produced Backlog Surplus Inventory
J an 4500 250 4250 6 7038 0 2788 2788Feb 5500 2788 2712 6 6078 0 3366 3366Mar 7000 3366 3634 6 6720 0 3086 3086Apr 10000 3086 6914 6 6720 194 0 -194
Work Hrs/worker Units perDays/mo per mo. Worker
J an 22 176 1,173Feb 19 152 1,013Mar 21 168 1,120Apr 21 168 1,120
0
2000
4000
6000
8000
10000
J an Feb Mar Apr May J un
45005500
7000
10000
8000
6000
....
Month Demand Beginning Prod. Units EndingInventory Reqmt Workers Produced Backlog Surplus Inventory
J an 4500 250 4250 6 7038 0 2788 2788Feb 5500 2788 2712 6 6078 0 3366 3366Mar 7000 3366 3634 6 6720 0 3086 3086Apr 10000 3086 6914 6 6720 194 0 -194May 8000 -194 8194 6 7038 1156 0 -1156J un 6000 -1156 7156 6 6396 760 0 -760
Month Material Straight Backlog Holding TotalCost Labor Cost Cost Cost
J an $35,190 $8,448 $0 $2,788 $46,426Feb $30,390 $7,296 $0 $3,366 $41,052Mar $33,600 $8,064 $0 $3,086 $44,750Apr $33,600 $8,064 $243 $0 $41,907May $35,190 $8,448 $1,445 $0 $45,083J un $31,980 $7,680 $950 $0 $40,610
$259,828
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Chapter 7: Schedule Management
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The Master Schedule
Point where actual orders are incorporated into scheduling system
Aggregate outputs broken down into individual end items– “It is the time-phased plan specifying how many and
when the firm plans to build each end item.”– Show mattress example …
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MPS Activities: Check for the Following Problems
Does schedule meet production plan? Does schedule meet demand forecasts? Are there priority or capacity conflicts? Are other constraints violated? Does schedule conform to policy? Does schedule conform to laws and rules? Does schedule provide flexibility?
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Rough-Cut Capacity Planning
Feasibility check of master production schedule Historical ratios of loads placed on workcenters
used Workloads assumed to fall in period end items
demanded
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Priority Planning
What materials are needed when Feasibility check of master production schedule to
make sure all materials will be available when needed
Determine when order is needed and schedule backwards from that date
Material Requirements Planning (MRP) systems often used
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Capacity Requirement Planning (CRP)
Inventory control system and master schedule used to determine required capacity over planning horizon
Load reports generated for each work center Inventory and lead times considered
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Loading
Deciding which jobs to assign to which work centers
Often some equipment or workers better for certain jobs
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Sequencing
After jobs assigned to work centers, order in which to process the jobs must be decided
Sequencing can have impact on timeliness of job completions
Priority rules often used
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Detailed (Short-Term) Scheduling
Detailed schedules itemizing specific jobs, times, materials developed
Typically done for only a few days in advance
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Dispatching
All previous activities are planning activities Dispatching is the physical release of a work order
from production planning
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Expediting
Task of getting job done on time once it is released to the shop floor
Special tags used to identify hot jobs