ACCTG 1 Lecture Notes - Lecture 6: Opportunity Cost, Profit Maximization, Aggregate Demand
Document Summary
Aggregate planning= intermediate-range capacity planning that typically covers a time horizon of 2 to. Another word equal to aggregate planning: sales & operations planning= makes intermediate-range decisions to balance supply and demand, integrating financial and operations planning. Capacity decisions on 3 levels: long term= product and service selection (which prod to offer), facility size and location, equipment decisions, layout facilities. They essentially establish the capacity constraints within which intermediate planning must function: intermediate term= general levels of employment, output, and inventories, which in turn establish boundaries within which short-range capacity decisions must be made. Starting point for scheduling and production control systems: short term= deciding the best way to achieve desired results within the constraints resulting from long-term and intermediate-term decisions. Aggregation planning is essentially a big picture approach to planning: they focus on a group of similar products or services or sometimes the entire product or service line (instead of individual products), e. g.
