33:799:301 Lecture Notes - Lecture 13: Master Production Schedule, Production Planning, Workforce Management

• School: Rutgers University
• Department: Supply Chain Management
• Course: 33:799:301
• Professor: James King

Document Summary

Production planning strategies - primary purpose is to establish the production methodology that will satisfy customer demand while balancing production costs and inventory through workforce management. Minimize cost: labor, inventory, plant and equipment, workforce. Three basic production strategies: level production strategy - relies on a constant output rate over an extended period of time based on worker productivity while varying inventory and backlog according to fluctuating demand. Works well for make-to-stock firms: chase production strategy - adjusts capacity to match demand. Firm hires and lays off workers to match output to demand, finished goods inventory remains consistent based on worker productivity. Works well for make-to-order firms: mixed production strategy - maintains stable core workforce while using short-term means, such as overtime, subcontracting and part time helpers to manage short-term demand fluctuations. Works well for make-to-stock firms with custom options, seasonal businesses.