agregat schedulling-kelompok 3

OPERATIONS MANAGEMENT“AGGREGATE SCHEDULING”

KELOMPOK 3KELOMPOK 3Azminullah Al RidhaAzminullah Al RidhaDiah ParamithaDiah ParamithaHefrandy HHefrandy HM Hadianto MubarakM Hadianto MubarakRenaldi MukriyantoRenaldi MukriyantoTeni KrisnaningsihTeni Krisnaningsih

AGENDAAGENDA

Aggregate PlanningAggregate Planning

Objective is to Objective is to satisfy market demandsatisfy market demand for products for products while minimizing cost over the planning period by while minimizing cost over the planning period by adjustingadjusting

Production ratesProduction ratesLabor levelsLabor levelsInventory levelsInventory levelsOvertime workOvertime workSubcontractingSubcontractingOther controllable variablesOther controllable variables

Aggregate planning Aggregate planning determines the quantity and timing determines the quantity and timing of resources thatof resources that are required to match immediate are required to match immediate periodic demand for all products.periodic demand for all products.

A logical overall unit for measuring sales and outputA logical overall unit for measuring sales and output A forecast of demand for intermediate planning period A forecast of demand for intermediate planning period

in these aggregate unitsin these aggregate units A method for determining costsA method for determining costs A model that combines forecasts and costs so that A model that combines forecasts and costs so that

scheduling decisions can be made for the planning scheduling decisions can be made for the planning periodperiod

Required for aggregate planningRequired for aggregate planning


The Planning ProcessThe Planning Process

Today 3 Months 1 year 5 years

Planning Horizon

Short-range plansJob assignmentsOrderingJob schedulingDispatching

Intermediate-range plansSales planningProduction planning and budgetingSetting employment, inventory, subcontracting levelsAnalyzing operating plans

Long-range plansR&DNew product plansCapital expensesFacility location, expansion

Responsible: Operations managers, supervisors, foremen

Responsible: Operations managers

Responsible: Top executives

Planning HorizonsPlanning Horizons

AGGREGATE PLANNING STRATEGIESThe Question for Operations Manager

When generating an aggregate plan, the operations manager must answer several questions :

1. should inventories be used to absorb changes in demand during the planning period?

2. should changes be accomodated by varying the size of workforce?

3. should part-timers be used, or should overtime and idle time absorb fluctuation?

4. should subcontractors be used on fluctuating orders so a stable workforce can be maintained?

5. should prices or other factors be changed to influence demand?

AggregatePlan for

Production

DemandForecasts,

orders

MasterProduction

Schedule, and MRP systems

Detailed WorkSchedules

ExternalCapacity

Subcontractors

Inventory OnHand

Raw MaterialsAvailable

Work Force

Marketplaceand Demand

Research andTechnology

ProductDecisions

ProcessPlanning & Capacity

Decisions

Relationships of the Aggregate PlanRelationships of the Aggregate Plan

AGGREGATE PLANNING STRATEGIESCapacity Options

A firm can choose from the following basic capacity (production) options :

1. Changing inventory levels2. Varying workforce size by hiring or layoffs3. Varying production rates through overtime or

idle time4. Subcontracting5. Using part-time workers

AGGREGATE PLANNING STRATEGIESDemand Options

The basic demand options are :1. Influencing demand2. Back ordering during high demand periods3. Counterseasonal product and service mixing

AGGREGATE PLANNING STRATEGIESMixing Options to Develop a Plan

Level Strategy

Chase Strategy

Production equals

demand

Production rate is constant

Table 13.1Table 13.1

OptionOption AdvantagesAdvantages DisadvantagesDisadvantages Some CommentsSome Comments

Changing Changing inventory inventory levelslevels

Changes in Changes in human human resources are resources are gradual or gradual or none; no abrupt none; no abrupt production production changeschanges

Inventory Inventory holding cost holding cost may increase. may increase. Shortages may Shortages may result in lost result in lost sales.sales.

Applies mainly to Applies mainly to production, not production, not service, service, operationsoperations

Varying Varying workforce workforce size by size by hiring or hiring or layoffslayoffs

Avoids the costs Avoids the costs of other of other alternativesalternatives

Hiring, layoff, Hiring, layoff, and training and training costs may be costs may be significantsignificant

Used where size Used where size of labor pool is of labor pool is largelarge

Aggregate Planning OptionsAggregate Planning Options



Varying Varying production production rates rates through through overtime or overtime or idle timeidle time

Matches Matches seasonal seasonal fluctuations fluctuations without hiring/ without hiring/ training coststraining costs

Overtime Overtime premiums; tired premiums; tired workers; may workers; may not meet not meet demanddemand

Allows flexibility Allows flexibility within the within the aggregate planaggregate plan

Sub-Sub-contractingcontracting

Permits Permits flexibility and flexibility and smoothing of smoothing of the firm’s the firm’s outputoutput

Loss of quality Loss of quality control; control; reduced profits; reduced profits; loss of future loss of future businessbusiness

Applies mainly in Applies mainly in production production settingssettings




Using part-Using part-time time workersworkers

Is less costly Is less costly and more and more flexible than flexible than full-time full-time workersworkers

High turnover/ High turnover/ training costs; training costs; quality suffers; quality suffers; scheduling scheduling difficultdifficult

Good for Good for unskilled jobs in unskilled jobs in areas with large areas with large temporary labor temporary labor poolspools

Influencing Influencing demanddemand

Tries to use Tries to use excess excess capacity. capacity. Discounts draw Discounts draw new customers.new customers.

Uncertainty in Uncertainty in demand. Hard demand. Hard to match to match demand to demand to supply exactly.supply exactly.

Creates Creates marketing marketing ideas. ideas. Overbooking Overbooking used in some used in some businesses.businesses.




Back Back ordering ordering during during high-high-demand demand periodsperiods

May avoid May avoid overtime. overtime. Keeps capacity Keeps capacity constant.constant.

Customer must Customer must be willing to be willing to wait, but wait, but goodwill is lost.goodwill is lost.

Allows flexibility Allows flexibility within the within the aggregate planaggregate plan

Counter-Counter-seasonal seasonal product product and service and service mixingmixing

Fully utilizes Fully utilizes resources; resources; allows stable allows stable workforceworkforce

May require May require skills or skills or equipment equipment outside the outside the firm’s areas of firm’s areas of expertiseexpertise

Risky finding Risky finding products or products or services with services with opposite opposite demand demand patternspatterns


GRAPHICALMETHODS

GRAPHICALMETHODS

MATHEMATICAL APPROACHES


Comparison of Aggregate Planning MethodsComparison of Aggregate Planning Methods

METHODS FOR AGGREGATE PLANNING

Five steps in the graphical method:

1.Determine the demand in each period2.Determine capacity for regular time, overtime, and subcontracting each period3.Find labor costs, hiring and layoff costs, and inventory holding costs4.Consider company policy that may apply to the workers or to stock levels5.Develop alternative plan and examine their total cost

Five steps in the graphical method:

1.Determine the demand in each period2.Determine capacity for regular time, overtime, and subcontracting each period3.Find labor costs, hiring and layoff costs, and inventory holding costs4.Consider company policy that may apply to the workers or to stock levels5.Develop alternative plan and examine their total cost




ExampleExample


GRAPHICALMETHODS

GRAPHICALMETHODS

Some of the mathematical approaches to aggregate planning:

-The Transportation Method of Linear Programming

- Management Coefficient Model

- other models (Linear Decision Rule & Simulation)

Some of the mathematical approaches to aggregate planning:

-The Transportation Method of Linear Programming

- Management Coefficient Model

- other models (Linear Decision Rule & Simulation)



ExampleExample

GRAPHICALMETHODS

GRAPHICALMETHODS





ExampleExample

Example of Graphical MethodExample of Graphical Method

70 70 –

60 60 –

50 50 –

40 40 –

30 30 –

0 0 –JanJan FebFeb MarMar AprApr MayMay JuneJune == MonthMonth 2222 1818 2121 2121 2222 2020 == Number ofNumber of

working daysworking days

Pro

duct

ion

rate

per

wor

king

day

Pro

duct

ion

rate

per

wor

king

day

Level production using average Level production using average monthly forecast demandmonthly forecast demand

Forecast demandForecast demand

Level vs. Chase StrategyLevel vs. Chase Strategy

Figure 13.4Figure 13.4

Cum

ulat

ive

dem

and

units

Cum

ulat

ive

dem

and

units

7,000 7,000 –

6,000 6,000 –

5,000 5,000 –

4,000 4,000 –

3,000 3,000 –

2,000 –

1,000 –

–JanJan FebFeb MarMar AprApr MayMay JuneJune

Cumulative forecast Cumulative forecast requirementsrequirements

Cumulative level Cumulative level production using production using average monthly average monthly

forecast forecast requirementsrequirements

Reduction Reduction of inventoryof inventory

Excess inventoryExcess inventory

Planning Example 1Planning Example 1

information

Plan 1

Example of Graphical Method Example of Graphical Method – 3 strategies plan

Plan 2

Plan 3


Plans Comparison


Information

Example of Transportation Method

Period 1(Mar)

Period 2(Apr)

Period 3(May)

Unused Capacity(Dummy)

Total Capacity Available(Supply)

Beginning Inventory

0100

2 4 0100

Regular 40700

42 44 0700

Overtime 50 5250

54 050

Subcontract 70 72150

74 0150

Regular X 40700

42 0700

OvertimeX

5050

52 050

SubcontractX

7050

72 0100 150

RegularX X

40700

0700

OvertimeX X

5050

050

SubcontractX x

70 0130

Total Demand 800 1000 750 230 2780

Farnsworth’s Transportation TableFarnsworth’s Transportation Table

Technique Solution Approaches Important Aspects

Graphical methods Trial and error Simple to understand and easy to use. Many solutions; one chosen may not be optimal

Transportation method of linear programming

Optimization LP software available; permits sensitivity analysis and new constraints; linear functions may not be realistic

Management coefficients model Heuristic Simple, easy to implement; tries to mimic manager’s decision process; uses regression

Simulation Change parameters Complex; model may be difficult to build and for managers to understand

Comparison of 4 Major Aggregate Comparison of 4 Major Aggregate Planning MethodsPlanning Methods

Controlling the cost of labor in service firms is critical. Successful techniques include:1.Accurate scheduling of labor-hours to assure quick response to customer demand2.An On-call labor resource that can be added or deleted to meet unexpected demand3.Flexibility of individual worker skills that permits reallocation of available labor4.Flexibility in rate of output or hours of work to meet changing demand.

These options may seem demanding, but they are not unusual in service industries, in which labor is the primary aggregate planning vehicle. For instance1.Excess capacity is used to provide study and planning time by real estate and auto salespersons.2.Police and fire departments have provisions for calling in off-duty personnel for major emergencies. Where the emergency is extended, police or fire personnel may work longer hours and extra shifts.3.When business is unexpectedly light, restaurants and retail stores send personnel home early, 4.Supermarket stock clerks work cash registers when checkout lines become to lengthy.5.Experienced waitresses increase their place and efficiency of service as crowds of customers arrive.

Aggregate Planning in ServicesAggregate Planning in Services

1. Restaurants

2. Hospitals

3. National Chains of Small Service Firms

4. Miscellaneous Service

5. Airline Industry

Five service scenarios:Five service scenarios:

In a business with a highly variable demand, such as a restaurant, aggregate scheduling is directed toward:1.Smoothing the production rate, and2.Finding the optimal size of the workforce.The general approach usually requires building very modest levels of inventory during slack periods and depleting inventory during peak periods, but using labor to accommodate most of the changes in demand.

Face aggregate planning problems in Allocating money, staff, and supplies to meet the demands of patients. The necessary labor focus of its aggregate plan has led to the creation of a new floating staff pool serving each nursing pod.

RestaurantsRestaurants

HospitalsHospitals

Both purchases and production capacity may be centrally planned when demand can be influence through special promotions. This approach to aggregate scheduling is often advantageous because it reduces costs and helps manage cash flow at independent sites.

Most “miscellaneous services provide intangible output. Aggregate planning for these services deals mainly with planning for human resource requirements and managing demand. The twofold goal is to level demand peaks and to design methods for fully utilizing labor resources during low-demand periods.

This planning is considerably more complex than aggregate planning for a single site or even for a number of independent sites. Aggregate planning consists of tables or schedules for:1.Number of flights in and out of each hub;2.Number of flights on all routes;3.Number of passengers to be serviced on all flights;4.Number of air personnel and ground personnel required at each hub and airport; and5.Determining the seats to be allocated to various fare classes.

National Chains of Small Service FirmsNational Chains of Small Service Firms

Miscellaneous ServicesMiscellaneous Services

Airline IndustryAirline Industry

Yield (or revenue) management is the aggregate planning process of allocating the company’s scarce resources to customers at price that will maximize yield or revenue.

YIELD MANAGEMENTYIELD MANAGEMENT

Organization that have perishable inventory, such as airlines, hotels, car rental agencies, cruise lines, and even electrical utilities, have the following shared characteristics that make yield management of interest:1.Service or product can be sold in advance of consumption2.Demand fluctuates3.The resource (capacity) is relatively fixed4.Demand can be segmented5.Variable costs are low and fixed costs are high

Ten

d t

o b

e u

nce

rtai

nTen

d t

o b

e p

red

icta

ble

Use

Quadrant 1:

MoviesStadiums/ arenas

Convention centersHotel meeting space

Quadrant 2:

HotelsAirlines

Rental carsCruise lines

Quadrant 3:

RestaurantsGolf courses

Internet serviceproviders

Quadrant 4:

HospitalsContinuing care

PriceTend to be Fixed Tend to be variable

YIELD MANAGEMENTYIELD MANAGEMENT MATRIX MATRIX

To make Yield Management work, the company needs to manage three issues:

1.Multiple pricing structures: these structures must be feasible and appear logical (and preferably fair) to the customer. Such justification may take various forms, for example, first-class seats on an airline or the preferred starting time at a golf course.

2.Forecasts of the use and duration of the use: How many economy seats should available? How much will customers pay for a room with an ocean view?

3.Changes in demand: this means managing the increased use as more capacity is sold. It also means dealing with issues that occur because the pricing structure may not seem logical and fair to all customers. Finally, it means managing new issues, such as overbooking because the forecast was not perfect.

A A MANAGERIAL PERSPECTIVE ON MANAGERIAL PERSPECTIVE ON AGGREGATE PLANNINGAGGREGATE PLANNING

““Geoff Buxey”Geoff Buxey”

Aggregate Planning first appeared in the literature nearly 40 years ago and has proven a popular topic for research ever since. However, industry seems to have ignored repeated claims that there are algorithms available which would yield significant cost savings. This paper explores the divergence between theory and practice, via an empirical study covering 30 firms.

Most authors have blamed weaknesses in particular methods for the lack of applications. The evidence presented here indicates that the Aggregate Planning model itself is at fault, and that the broad characteristics of real production plans follow from other business, tactical, or operational considerations. Furthermore, a chase option is generally preferred at the outset.

AbstractAbstract


The Aggregate Planning model was developed as a vehicle for minimizing the total marginal costs of manufacturing a range of products with a strong seasonal sales pattern

The principal discretionary costs are :•overtime (and undertime)•shift•Subcontract•Premiums•payments related to hiring •firing any additional staff.

Industrial PracticeIndustrial Practice

A study was conducted, involving 30 manufacturers, to find out exactly how production planning occurs in practice. The sample included both large and small companies, capital and labour intensive processes, and a range of different industries across three states, but all had a recognised seasonal problem.

The main areas of discussion were the general business environment and objectives, resources and production planning, shopfloor processes and constraints, and, flexibility.

Business StrategyBusiness Strategy

From a business perspective the ideal situation is "level" aggregate production in conjunction with a "chase" plan by model.

The priority order to maximise sales revenue and to spread fixed costs thinly via high utilisation of plant and equipment. The latter maximises cash flow and minimises financial risk (unsold production).

The ways that they have gone about this are:

• develop complementary products • redesign models according to the season • export to the northern hemisphere • market engineering skills and become subcontractors

Schedulling TacticsSchedulling Tactics

Aggregate Planning is aimed at this stage of the production planning hierarchy where the most cost-effective schedule is defined in broad terms.Simply convinced that these tactics bring superior results.

Nowaday industries are focuses on eliminating all forms of waste and non-value adding work and has a much greater impact than trying to "optimise" a static production model. The second major reason for choosing chase tactics is to build in flexibility. Flexibility implies good customer service without sacrificing high productivity

Operational FactorsOperational Factors

Strategic and tactical decisions largely determine the nature of production planning at 23(78%) of the 30 companies surveyed. The remainder are each influenced by special characteristics generally related to either the product or the processes, which can be categorised as follows:•short product shelf life (crumpets, beer, meat pies);•bulky or awkward products (beer, petrol, cement, hoses, pine landscaping products);•seasonal raw materials (convenience foods);•long training times (marine distress flares, wood heaters, colour television sets);•ownership of retail outlets (gas barbecues).

The objective is to balance the costs of holding inventory against the costs of batch changeovers (mainly waste materials). No labour charges are involved so the chase philosophy dominates. The actual size of the flexible workforce is determined by running the model in experimental mode every quarter, adjusting its provisional numbers for the last nine months of the one year horizon by trial and error.

Operations ManagementOperations Management

The multiple objectives of production planning can be summarised:• maximise sales revenue,• spread fixed costs,• provide a high level of customer service,• good labour and materials productivity,• minimise obsolescence,• maximise liquidity,• maintain scheduling flexibility,• establish good employee relations.

There is no "hiring and firing" of temporary staff. The most common arrangement is to employ casual workers for several months on mutually agreed terms.

ConclusionsConclusions

The investigation reveals that Aggregate Planning is never undertaken in the way promoted by the literature. There is no product aggregation/disaggregation, although the initial forecasts and schedules may be simplified by using family groups to which minor finish or packaging details are added later.

The problem is tackled at three levels, strategic, tactical, and operational.

Two examples from the literature show that linear programming can also be applied successfully to formulate an MPS.

The literature believes that greater sophistication, via integration to avoid sub-optimisation, is the key to advances in production planning, although it cannot as yet come up with a comprehensive model.

This research shows that in real life good guidelines, prudence, and flexibility are more important, although there may be room for computerised decision support systems in developing the former.

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