Operations ppt
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Aggregate planning is a form of operations management that focuses on satisfying expected demand over a planning horizon, typically 3-18 months in the future. It considers factors like production levels, workforce sizes, inventory levels, and aims to maximize customer service while minimizing costs related to inventory, workforce changes, and production rate fluctuations. Aggregate planning can be done intuitively based on experience, or more formally using techniques like linear programming to find optimal solutions. The goal is to match supply and demand in the most efficient way possible.
Operations ppt
- 1. DEEPIKA MANOHAR PRITAM KUDNAVER JAGU MAJEE HIMANSHU PANDEY MASUD KARIM GAURAV KR PAL
- 2. Attempts to match the supply of and demand for a product or service by determining the appropriate quantities and timing of inputs, transformation, and outputs. Decisions made on production, staffing, inventory and backorder levels.
- 3. Considers a "planning horizon" from about 3 to 18 months, with periodic updating Looks at aggregate product demand, stated in common terms Looks at aggregate resource quantities, stated in common terms Possible to influence both supply and demand by adjusting production rates, workforce levels, inventory levels, etc., but facilities cannot be expanded.
- 4. Maximize customer service Minimize inventory investment Minimize changes in workforce levels Minimize changes in production rates Maximize utilization of plant and equipment
- 5. A managerial statement of the period-by- period staff sizes and labor-related capacities, given customer requirements and capacity limitations.
- 6. Attempts to handle fluctuations in demand by focusing on demand management Use pricing strategies and/or advertising and promotion Develop counter-cyclical products Request customers to backorder or advance- order Do not meet demand
- 7. Attempts to handle fluctuations in demand by focusing on supply and capacity management Vary size work force size by hiring or layoffs Vary utilization of labour and equipment through overtime or idle time Build or draw from inventory Subcontract production Negotiate cooperative arrangements with other firms Allow backlogs, back orders, and/or stockouts
- 8. Combines elements of both an active strategy and a passive (reactive) strategy Firms will usually use some combination of the two
- 9. Capacities (workforce levels, production schedules, output rates, etc.) are adjusted to match demand requirements over the planning horizon.
- 10. Advantages: Anticipation inventory is not required, and investment in inventory is low Labor utilization is kept high Disadvantages: Expense of adjusting output rates and/or workforce levels Alienation of workforce
- 11. Capacities (workforce levels, production schedules, output rates, etc.) are kept constant over the planning horizon.
- 12. Stable output rates and workforce levels Unlike the rest of Psychology it focuses on how we are different from each other rather than generalizing findings to everybody.
- 13. Greater inventory investment is required Increased overtime and idle time Resource utilizations vary over time
- 14. Intuitive methods use management intuition, experience, and rules-of-thumb, frequently accompanied by graphical and/or spreadsheet analysis.
- 15. Easy to use and explain Many solutions are possible, most of which are not optimal
- 16. Suppose you have the following forecasts for demand to meet: Month 1 2 3 4 5 6 Demand 1000 1200 1500 1900 1800 1600
- 17. Regular production cost $35/unit Lost sales $100/unit Inventory carrying costs $10/unit/month Subcontracting costs $60/unit Hiring costs $1500/worker Firing costs $3000/worker Beginning workforce level 20 workers Capacity per worker 50 units/month Initial inventory level 700 units Closing inventory level 100 units
- 18. Find the requirements for the period of the plan and produce the average amount needed per month to meet the plan.
- 19. Average Requirements : total requirements - opening inv. + closing inv. number of periods
- 20. (9000 - 700 + 100)/6 = 1400 units/period Steps: Enter the production data Determine hire/fire to get to production level desired Update inventory levels Does the inventory run out - If it does recalculate average production needed and go to step 1 Calculate totals for each category Calculate costs
- 21. Trial and Error to find a good solution Use Excel to model the problem and test the impact of different solutions Build the model using proper structure with key variables at the top and a summary of key results immediately below.
- 22. Aggregate planning problems can be solved optimally using linear programming (LP). Given the constraints on requirements, production capabilities, allowed workforce changes, overtime and subcontracting limits plus all relevant costs LP will find an optimal solution to the problem which minimizes total costs. Excel's Solver add-in will perform LP
- 23. An aggregate plan takes into consideration the overall level of output and the capacity that is required to produce it. There are two basic approaches to estimating the capacity that will be required to produce an aggregation or grouping of a company’s products.
- 24. With this approach, the desirable overall plan is developed for the periods in the planning horizon, with the plan for the first few periods being fairly firm. This approach rests on the assumption that if the proper amount of total capacity is available, the right amount of capacity for all of the parts will be available. With this approach, the desirable overall plan is developed for the periods in the planning horizon, with the plan for the first few periods being fairly firm. This approach rests on the assumption that if the proper amount of total capacity is available, the right amount of capacity for all of the parts will be available.
- 25. This is also called as resource requirement planning (sometimes called rough-cut capacity planning) which is usually used in conjunction with material requirement planning (MRP-1) both capacity and materials must be available for products to be made and hence material plans need to be coordinated with a more detailed production plan.
- 26. This is done in conjunction with the tentative mater production schedule to test its feasibility in terms of capacity before the Master Production Schedule (MPS) is finalized. This ensures that a proposed MPS does not inadvertently overload any key department, work centre or machine, making the MPS unworkable. Although the check can be applied to all work centers, it is typically applied only to the critical work centers that are most likely to be bottlenecks. It is a quick and inexpensive way to find and correct gross discrepancies between the capacity requirements of the MPS and the available capacity.
- 27. For manufacturing firms the luxury of building up inventories during periods of slack demand allows coverage of an anticipated time when demand will exceed capacity. Services cannot be stockpiled or inventoried so they do not have this option. Also, since services are considered "perishable," any capacity that goes unused is essentially wasted. An empty hotel room or an empty seat on a flight cannot be held and sold later, as can a manufactured item held in inventory.
- 28. Service capacity can also be very difficult to measure. When capacity is dictated somewhat by machine capability, reasonably accurate measures of capacity are not extremely difficult to develop. However, services generally have variable processing requirements that make it difficult to establish a suitable measure of capacity. Historically, services are much more labor intensive than manufacturing, where labor averages 10 percent (or less) of total cost. This labor intensity can actually be an advantage because of the variety of service requirements an individual can handle. This can provide quite a degree of flexibility that can make aggregate planning easier for services than manufacturing.
- 29. Operations management, also called "operations planning" or "operations scheduling," is a term assigned to the planning of production in all aspects, from workforce activities to product delivery. While this type of planning is almost exclusively seen in manufacturing environments, many of the techniques are used by service- oriented businesses. Simple to implement, operations management can be applied using nothing more than a spreadsheet program.
- 30. Operations management is primarily concerned with the efficient use of resources. While it is sometimes referred to as production planning and employs many of the same techniques, the primary distinguishing characteristic is that production planning is narrowly focused on the actual production whereas operations management looks at the operation as a whole.
- 31. Operations planning is an important part of any business. Effective and efficient management of operations is the hallmark of a successful company. Operations management is an old concept, but as many of the techniques of operations management have gained attention in the business media, the definition has become somewhat unclear, making effective management of operations seem more complicated than it really is.
- 32. Operations management has a broad focus: inventory levels must be managed, materials ordered/stored, capacity maximized, relationships with suppliers maintained, and the interactions within the system monitored.
- 33. Capacity planning is focused on maximizing the capacity of a company to make it more efficient and more profitable. Capacity planning at its most basic attempts to match the volume the company is able to produce to the demand to avoid downtime by preventing bottlenecks.
- 34. Aggregate planning is a static form of production planning. It focuses on satisfying expected demand. This may be in relation to production, the workforce itself or inventory management. Aggregate planning basically ties facility planning in with scheduling decisions and it does so quantitatively, meaning it produces numbers to back up an operations plan.