What is aggregate planning process?

Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization. In simple terms, aggregate planning is an attempt to balance capacity and demand in such a way that costs are minimized.

What is aggregate planning and what is its purpose?

Aggregate planning involves developing a general plan for employment, output, and inventory levels. The goal is to develop a plan that makes efficient use of the resources of an organization.

What is your understand the importance of aggregate planning as a supply chain activity?

Aggregate planning as an Operational Tool Aggregate planning helps achieve balance between operation goal, financial goal and overall strategic objective of the organization. It serves as a platform to manage capacity and demand planning.

What are the advantages of aggregate planning?

Create optimized schedules that balance production efficiency and delivery performance. Maximize throughput on bottleneck resources to increase revenue. Synchronize supply with demand to reduce inventories. Provide company-wide visibility to resource capacity.

What is aggregate planning in production planning and control?

Aggregate production planning is concerned with the determination of production, inventory, and work force levels to meet fluctuating demand requirements over a planning horizon that ranges from six months to one year. Plans are then based on aggregate demand for one or more aggregate items.

What are the factors affecting aggregate planning?

Factors considered in the aggregate planning activity include:

Sales forecasts.
Inventory investment.
Capital equipment utilization.
Work force capacity.
Skills training requirements.
Corporate policies concerning customer service levels, overtime, and subcontracting.

What are the types of aggregate planning?

6 types of aggregate planning strategies

Type 1: Pricing differentials and promotions. Managers use pricing differentials and promotions to boost demand to match available capacity.
Type 2: Back ordering.
Type 3: Generating new demand.
Type 4: Seasonal hiring.
Type 5: Subcontracting.
Type 6: Building up inventory.

What is aggregate planning in production and operations management?

Aggregate planning is a marketing activity that does an aggregate plan for the production process, in advance of 6 to 18 months, to give an idea to management as to what quantity of materials and other resources are to be procured and when, so that the total cost of operations of the organization is kept to the minimum …