MGSC 346 Lecture Notes - Lecture 8: Linear Programming, Material Requirements Planning, Master Production Schedule
Document Summary
Sales & operations planning - develop an economic strategy to meet forecasted demand over an immediate time horizon. Establish a company wide plan for - allocating resources for maximum utilization. Requirements - logical overall unit for measuring sales and output. Aggregate planning objectives - provides for adequate production capacity to meet expected demand. Objective - minimize cost over the planning period by adjusting. Varying workforce size by hiring or layoffs. Varying production capacity through overtime or idle time. Capacity options - chase demand - varying workforce size by hiring or layoffs. Laying off workers may lower moral and productivity. Increase inventory in low demand periods to meet high demand in the future. Shortages can mean lost sales due to long lead times and poor customer service. Peak demand - maintaining resources for high-demand levels. Varying production rate through overtime or idle time - allows constant workforce. Overtime can be costly and may drive down productivity.