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Shilpa Shinde
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NAME Sneha Adivarekar Prathamesh Deo Mayur Gharat Shrutika Madan Tanuj PaTidar Nayantara Sable
ROLL NO. 01 11 21 31 41 51
INTRODUCTION
Process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization. In simple terms, It is an attempt to balance capacity and demand in such a way that costs are minimized. The term "aggregate" is used because planning at this level includes all resources "in the aggregate. Aggregate planning is considered to be intermediate-term (as opposed to long- or short-term) in nature that is 3-18 months.
AGGREGATE PLANNING
Operations managers
DEFINITION
Type of medium range capacity planning that typically covers a 3 to 18 month period of time. Used in a manufacturing environment and determines overall output levels planned as well as appropriate resource input mix to be used for related groups of products.
www.businessdictionary.com
OBJECTIVES
Minimize Costs/Maximize Profits Maximize Customer Service Minimize Inventory Investment Minimize Changes in Production Rates (Setup cost) Minimize Changes in Workforce Levels Maximize Utilization of Plant and Equipment
IMPORTANCE
Achieving financial goals by reducing overall variable cost and improving the bottom line. Maximum utilization of the available production facility. Provide customer delight by matching demand and reducing wait time for customers. Reduce investment in inventory stocking. Able to meet scheduling goals there by creating a happy and satisfied work force.
Advantages
Disadvantages
Changes in Human resources are Inventory holding cost may increase. gradual or none; no abrupt production Shortages may result in changes. Lost sales.
Avoids the use other alternatives . Less costly and more flexible than full-time workers Tries to use excess capacity. Discounts draw new customers.
High turnover/training costs; quality suffers; scheduling difficult Uncertainty in demand. Hard to match demand to supply exactly
Influencing demand
Uncertainty in demand. Hard to match demand to supply exactly Counter seasonal products and service mixing
Daily production is uniform. Use inventory or idle time as buffer. Stable production leads to better quality and productivity.
Match output rates to demand forecast for each period. Vary workforce levels or vary production rates. Favored my many service organizations.
STEPS IN AP
Determine demand for each period. Determine capacity for each period. Identify company, departmental, or union policies that are pertinent. Determine unit costs for units produced. Develop alternative plans and compute the cost for each. If satisfactory plans emerge, select the one that best satisfies objectives.
OPTIONS WHICH CAN BE USED TO INCREASE OR DECREASE CAPACITY TO MATCH CURRENT DEMAND Lay off Overtime Part-time or casual labor Inventory Subcontracting Cross training Other methods
PLAN-2 SUBCONTRACTING
PLAN-3
VOLTAS- Manufactures of Window air conditioners. Models- 0.75, 1, 1.5, 2 tons. In 2009- expected sales in units 1 lacs and succeeded. In 2009- They produced above units in 2 shifts with 300 workers in each shift. In 2010- co. expected to sell 1.5 lacs depending upon the success of 2009 Institutional orders- Aggregate 10000 units to be produced in 2010 Total Expected Production- aggregate 160000 units that is 60000 additional units with existing production capacity(machine/ labor force)
CONTI..
Management option to meet the Fluctuating Demand (Capacity Adjustment):Build inventories in slack period in anticipation of higher demand in future.
Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra. Products- cars, trucks, vans, coaches, buses and military vehicles. world's eighteenth-largest motor vehicle manufacturing company. Founded in 1945 as a, the co manufacturer of locomotives company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pun e (India), and in Argentina, South Africa, Thailand and the United Kingdom. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and the British premium car maker Jaguar Land Rover in 2008
Inventory carrying cost Stock out cost Cost of subcontracting Cost of hiring and traning Laying off cost Time required for 1 unit Regular time wage Overtime wage Starting inventory Safey stock Present workforce Overtime per worker not to exceed
Rs 2.00 per unit/month Rs 5.00 per unit/month Rs 60.00 per unit Rs 400.00 per worker Rs 500.00 per worker 7 labour hours. Rs 15.00 per hour Rs 10.00 per hour 500 units 25% of monthly demand 100 4 hours per day
The cost of material can be ignored as it is common to every unit that is produced.
SOLUTION
Jan Feb Mar Apr May Jun cost
Starting inventory
No. od days No. of hr per worker Total hrs Labour employed
400
25 200 8000 40
240
25 186 7440 40
-135
24 192 7680 40
347
20 170 6800 40
499
25 200 8000 40
739
24 192 7680 40
Actual production
Inventory Regular wages Inventory cost
175
240 120000 480
174
-135
168
347
140
499
175
739
168
321 111600 624 680400 4274