PPIC

Aggregate Planning Chapter 003 www.andresugiyono.edublogs.org

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ANDRE SUGIYONO

Learning Objectives
When you complete this chapter, you should be able to : Identify or Define:

Aggregate planning Tactical scheduling Graphic technique for aggregate planning Mathematical techniques for aggregate planning How to do aggregate planning How service firms develop aggregate plans
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ANDRE SUGIYONO

Describe or Explain:

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AGREGAT ?

KAPASITAS PRODUKSI. PERENCANAAN AGREGAT? Proses penetapan tingkat output/kapasitas produksi secara keseluruhan guna memenuhi tingkat permintaan yang diperoleh dari peramalan dan pesanan dengan tujuan meminimalkan total biaya produksi.
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FUNGSI PERENCANAAN AGREGAT

Menjamin rencana penjualan dan rencana produksi konsisten terhadap rencana strategi perusahaan Alat ukur performansi proses perencanaan produksi Menjamin kemampuan produksi konsisten terhadap rencana produksi

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FUNGSI PERENCANAAN AGREGAT

Memonitor hasil produksi actual terhadap rencana produksi dan membuat penyesuaian Mengatur persediaan produk jadi untuk mencapai target dan membuat penyesuaian Mengarahkan penyusunan dan pelaksanaan jadwal induk produksi

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TUJUAN PERENCANAAN AGREGAT

Mengembangkan perencanaan produksi yang feasible pada tingkat menyeluruh yang akan mencapai keseimbanagan antara permintaan dan suplai dengan memperhatikan biaya minimal dari rencana produksi yang dibuat, walaupun biaya bukan satu-satunya bahan pertimbangan. Sebagai masukan perencana sumber daya sehingga perencanaan sumber daya dikembangkan untuk mendukung perencanaan produksi. Meredam (stabilisasi) produksi dan tenaga kerja terhadap fluktuasi permintaan
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INPUT AGREGAT PLANNING

Sumber daya yang tersedia sepanjang periode

rencana produksi harus diketahui Data permintaan yang berasal dari peramalan dan pesanan harus tersedia Memasukkan kebijakan perusahaan yang berkenaan dengan perencanaan agregat, misalnya perubahan tingkat tenega kerja, dan penentuan kebutuhan sumber daya
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ANDRE SUGIYONO

Aggregate Planning Requires

Logical overall unit for measuring sales and outputs Forecast of demand for intermediate planning period in these aggregate units Method for determining costs Model that combines forecasts and costs so that planning decisions can be made
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Planning
Setting goals & objectives

Example: Meet demand within the limits of available resources at the least cost Example: Hire more workers Example: Begin hiring in Jan.; finish, Mar.

Determining steps to achieve goals

Setting start & completion dates

Assigning responsibility
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Planning Tasks and Responsibilities

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Planning Horizons
Short-range plans Job assignments Ordering Job scheduling Dispatching
Responsible: Operations managers, supervisors, foremen Responsible: Operations managers

Intermediate-range plans Sales planning Production planning and budgeting Setting employment, inventory, subcontracting levels Analyzing operating plans

Responsible: Top executives

Long-range plans R&D New product plans Capital expenses Facility location, expansion

Today

3 Months

1 year

5 years

Planning Horizon
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ANDRE SUGIYONO

Relationships of the Aggregate Plan

Marketplace and Demand Product Decisions Process Planning & Capacity Decisions Aggregate Plan for Production Master Production Schedule, and MRP systems Research and Technology

Demand Forecasts, orders

Work Force

Raw Materials Available External Capacity Subcontractors

Inventory On Hand

Detailed Work Schedules

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Exhibit 14.1 Exhibit 14.1

Process planning Strategic capacity planning

Long range Intermediate Forecasting & demand range management Manufacturing

Master scheduling

Sales and operations (aggregate) planning Sales plan Aggregate operations plan

Services

Material requirements planning Weekly workforce and customer scheduling Daily workforce and customer scheduling
ANDRE SUGIYONO

Short range

Order scheduling

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Whats Needed for Aggregate Planning

A mathematically based aggregate planning model requires considerable: time
problem definition model development model verification model application

expertise

people who understand the problem people who understand both the modeling process, and the

money

specific model

money to pay for all of the above often requires funding for several people for several months!
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ANDRE SUGIYONO

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Aggregate Planning
Provides the quantity and timing of production for intermediate future

Usually 3 to 18 months into future Often expressed in common units

Combines (aggregates) production

Example: Hours, dollars, equivalents (e.g., FTE students)

Involves capacity and demand variables

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Aggregate Planning Goals

Meet demand Use capacity efficiently Meet inventory policy Minimize cost
Labor Inventory Plant & equipment Subcontract

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Aggregate Planning Strategies Pure Strategies

Capacity Options change capacity:

changing inventory levels varying work force size by hiring or layoffs varying production capacity through overtime or idle time subcontracting using part-time workers

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Aggregate Planning Strategies Pure Strategies

Demand Options change demand:

influencing demand backordering during high demand periods counterseasonal product mixing

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 Main purpose: Specify the optimal combination of production rate (units completed per unit of time) workforce level (number of workers) inventory on hand (inventory carried from previous period) Product group or broad category (Aggregation) This planning is done over an intermediaterange planning period of 3 to 18 months
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The Aggregate Operations Plan

Balancing Aggregate Demand and Aggregate Production Capacity

10000

Suppose the figure to Suppose the figure to the right represents the right represents forecast demand in forecast demand in units units Now suppose this Now suppose this lower figure represents lower figure represents the aggregate capacity the aggregate capacity of the company to meet of the company to meet demand demand What we want to do is What we want to do is balance out the balance out the production rate, production rate, workforce levels, and workforce levels, and inventory to make inventory to make these figures match up these figures match up
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10000 8000 8000 6000 4000 2000 0 Jan Feb Mar 9000 8000 6000 6000 4000 2000 0 Jan Feb Mar Apr May Jun 4500 4000 4000 Apr May Jun 5500 4500 7000 6000

10000 8000

ANDRE SUGIYONO

Required Inputs to the Production Planning System

Competitors behavior Externa l capacity Raw material availability Planning for production Market demand Economic conditions External to firm

Current Current physical workforce capacit y JURUSAN TEKNIK INDUSTRI

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Inventory levels

Activities required for ANDRE SUGIYONO productio n

Internal to firm

Aggregate Scheduling Options Advantages and Disadvantages

Option
Changing inventory levels

Advantage
Changes in human resources are gradual, not abrupt production changes

Disadvantage
Inventory holding costs; Shortages may result in lost sales

Some Comments
Applies mainly to production, not service, operations

Varying workforce size by hiring or layoffs

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Avoids use of Hiring, layoff, other alternatives and training costs

Used where size of labor pool is large

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Advantages/Disadvantages Continued
Option
Varying production rates through overtime or idle time Subcontracting

Advantage
Matches seasonal fluctuations without hiring/training costs Permits flexibility and smoothing of the firm's output

Disadvantage Some Comments

Overtime premiums, tired workers, may not meet demand Loss of quality control; reduced profits; loss of future business Allows flexibility within the aggregate plan Applies mainly in production settings

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ANDRE SUGIYONO

Advantages/Disadvantages Continued
Option
Using part-time workers

Advantage
Less costly and more flexible than full-time workers

Disadvantage
High turnover/training costs; quality suffers; scheduling difficult Uncertainty in demand. Hard to match demand to supply exactly.

Some Comments
Good for unskilled jobs in areas with large temporary labor pools Creates marketing ideas. Overbooking used in some businesses.

Influencing demand

Tries to use excess capacity. Discounts draw new customers.

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ANDRE SUGIYONO

Advantage/Disadvantage Continued
Option
Back ordering during highdemand periods

Advantage

Disadvantage

Some Comments
Many companies backorder.

May avoid Customer must overtime. Keeps be willing to capacity constant wait, but goodwill is lost.

Counterseasonal Fully utilizes May require products and resources; allows skills or service mixing stable workforce. equipment outside a firm's areas of expertise.

Risky finding products or services with opposite demand patterns.

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ANDRE SUGIYONO

STRATEGI DAN TEKNIK PERENCANAAN PRODUKSI

STRATEGI MURNI STRATEGI CAMPURAN

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STRATEGI MURNI Strategi murni adalah strategi dengan melakukan perubahan pada salah satu factor yang tersebut diatas, yang meliputi : 1.Mengendalikan jumlah inventori 2.Mengendalikan jumlah tenaga kerja 3.Subkontrak 4.Mempengaruhi permintaan
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ANDRE SUGIYONO

STRATEGI CAMPURAN Strategi ini merupakan penggunaan dua atau lebih strategi murni untuk menghasilkan perencanaan produksi yang feasible.

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METODE PERENCANAAN PRODUKSI

LEVEL METHOD LEVEL METHOD WITH OVERTIME CHASE STRATEGY LINIER PROGRAMMING COMPROMISE STRATEGY

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The Extremes

Level Strategy Production rate is constant

Chase Strategy Production equals demand

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Aggregate Planning Strategies

Mixed strategy
Combines 2 or more aggregate scheduling options

Level scheduling strategy

Produce same amount every day Keep work force level constant Vary non-work force capacity or demand options Often results in lowest production costs

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ANDRE SUGIYONO

Key Strategies for Meeting Demand

Chase

Level

Some combination of the two

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LEVEL METHOD Metode ini menghitung jumlah tenaga kerja yang dibutuhkan berdasarkan permintaan dan inventori yang ada. Dengan inventori tetap setiap periodenya. Tenaga kerja yang ada harus dapat memenuhi kebutuhan permintaan total selama satu tahun. Dan diasumsikan tidak ada overtime.

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ANDRE SUGIYONO

LEVEL METHOD WITH OVERTIME Perhitungan yang dilakukan sama seperti level work force, hanya diasumsikan adanya overtime. CHASE STRATEGY Pada strategi ini adanya kebutuhan tenaga kerja yang bervariansi setiap periode berdasarkan permintaan yang harus dipenuhi. Dan adanya inventori yang besarnya sama tiap periodenya.
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ANDRE SUGIYONO

LINIER PROGRAMMING Linier programming digunakan bila produksi yang berjalan terdiri dari dua macam produk atau lebih. Karena tidak mungkin diselesaikan dengan metode sebelumnya. Prosedur perhitungan yang dilakukan melalui metode simplek yang biasanya terdapat dalam perhitungan mengenai penelitian operasional.

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TAHAPAN AGREGAT PLANNING

COLLECTING DATA : SALES FORECAST,ORDERS, ADANYA BACKORDERS,INVENTORY AWAL MEMBUAT TABEL INFORMASI MENENTUKAN KAPABILITAS PRODUKSI MELAKUKAN PARTNERSHIP MEETING YANG DIHADIRI OLEH SELURUH MANAJER.
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FORMULA
RENCANA PRODUKSI = (PERMINTAAN TOTALINVENTORI AWAL)+INVENTORI AKHIR RENCANA PRODUKSI HARIAN = RENCANA PRODUKSI BULANAN / JML HARI KERJA SIKLUS WAKTU = JAM KERJA YG TERSEDIA PERHARI / PRODUKSI HARIAN
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LEVEL METHOD
MEMPUNYAI DISTRIBUSI MERATA MEMPERTAHANKAN TINGKAT KESTABILAN PRODUKSI SEMENTARA MENGGUNAKAN INVENTORI YANG BERVARIASI UNTUK MENGAKUMULASI OUTPUT RENCANA PRODUKSI = PERMINTAAN TOTAL TAHUNAN / BANYAKNYA PERIODE INVENTORY = (INVENTORI AWAL + PRODUKSI) PERMINTAAN TOTAL ANDRE SUGIYONO JURUSAN TEKNIK INDUSTRI
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CHASE STRATEGY
MEMPERTAHANKAN TINGKAT KESTABILAN INVENTORY PRODUKSI BERVARIASI MENGIKUTI PERMINTAAN TOTAL RENCANA PRODUKSI = PERMINTAAN TOTAL

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COMPROMISE STRATEGY
KOMPROMI ANTARA KEDUA METODE PERENCANAAN PRODUKSI DITETAPKAN TERLEBIH DAHULU HORISON WAKTU PERENCANAAN PRODUKSI PRODUKSI DILAKUKAN KETIKA INVENTORY ON HAND HABIS. RENCANA PRODUKSI = PERMINTAAN TOTAL TAHUNAN / BANYAKNYA HORISON WAKTU PERENCANAAN
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Aggregate Planning Examples: Unit Demand and Cost Data

Suppose we have the following unit Suppose we have the following unit demand and cost information: demand and cost information:
Demand/mo Jan 4500 Feb 5500 Mar 7000 Apr 10000 May 8000 Jun 6000

Materials Holding costs Marginal cost of stockout Hiring and training cost Layoff costs Labor hours required Straight time labor cost Beginning inventory Productive hours/worker/day Paid straight INDUSTRI JURUSAN TEKNIK hrs/day UNISSULA SEMARANG Workforce

$5/unit $1/unit per mo. $1.25/unit per mo. $200/worker $250/worker .15 hrs/unit $8/hour 250 units 7.25 8 ANDRE SUGIYONO 200 people

Cut-and-Try Example: Determining Straight Labor Costs and Output

Given the demand and cost information below, what Given the demand and cost information below, what are the aggregate hours/worker/month, units/worker, and are the aggregate hours/worker/month, units/worker, and dollars/worker? dollars/worker? Demand/mo Jan 4500 Feb 5500 Mar 7000 Apr 10000 May 8000 Jun 6000

7.25x2 2

Productive hours/worker/day Paid straight hrs/day

7.25 8

22x8hrsx$8=$14 08Dys/m a o
H /wrk r/m rs o e o U its o e n /wrk r $ o e /wrk r
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7.25x0.15=1.09 & 1.09x22=23.98

Mr a 2 1 Ar p 2 1 My a 2 2 Jn u 2 0

Jn a 2 2 19 5 .5 2 .9 3 8 $ ,4 8 1 0

Fb e 1 9

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Chase Strategy (Hiring & Firing to meet demand)

Jn a Dy /m as o H /wrk r/m rs o e o U its o e n /wrk r $ o e /wrk r 2 2 19 5 .5 2 .9 3 8 $ ,4 8 1 0

Lets assume our current workforce is 77workers. Lets assume our current workforce is workers.

First, calculate net requirements for production, or 4500-250=4250 units

Jn a Dmn e ad Bg in . e. v Nt re . e q Rq wrk rs e. o e H d ire F d ire W rk rc o fo e E d JURUSANto n in in e TEKNIK INDUSTRI g v n ry

UNISSULA SEMARANG

4 0 ,5 0 20 5 4 5 ,2 0 17 3 7 .2 2 2 20 0 0

Then, calculate number of workers needed to produce the net requirements, or 4250/23.98=177.23 or 178 workers Finally, determine the number of workers to hire/fire. In this case we only need 178 workers, we have 200, so 22 can be fired. ANDRE SUGIYONO

Below are the complete calculations for the remaining Below are the complete calculations for the remaining months in the six month planning horizon months in the six month planning horizon
Jn a Dy /m as o H /wrk r/m rs o e o U its o e n /wrk r $ o e /wrk r 2 2 19 5 .5 2 4 $ ,4 8 1 0 Fb e 1 9 Mr a 2 1 Ar p 2 1 My a 2 2 Jn u 2 0

Jn a Dmn e ad Bg in . e. v Nt re . e q Rq wrk rs e. o e H d ire F d ire W rk rc o fo e E d gin e to n in v n ry

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Fb e 5 0 ,5 0

Mr a 7 0 ,0 0

Ar p 1 ,0 0 0 0

My a 8 0 ,0 0

Jn u 6 0 ,0 0

4 0 ,5 0 20 5 4 5 ,2 0 17 3 7 .2 2 2 20 0 0

20 0 0

20 0 0

20 0 0
ANDRE SUGIYONO

20 0 0

20 0 0

Below are the complete calculations for the remaining months in the six month planning horizon with the other costs included
Demand Beg. inv. Net req. Req. workers Hired Fired Workforce Ending inventory Jan 4,500 250 4,250 3.997 3 4 0 Feb 5,500 5,500 5.989 2 6 0 Mar 7,000 7,000 6.897 1 7 0 Apr 10,000 10,000 9.852 3 10 0 May 8,000 8,000 7.524 2 8 0 Jun 6,000 6,000 6.207 1 7 0

Material Labor Hiring cost Firing cost

Jan Feb Mar Apr May Jun $21,250.00 $27,500.00 $35,000.00 $50,000.00 $40,000.00 $30,000.00 5,627.59 7,282.76 9,268.97 13,241.38 10,593.10 7,944.83 400.00 200.00 600.00 750.00 500.00 250.00
ANDRE SUGIYONO

Costs 203,750.00 53,958.62 1,200.00 1,500.00

$260,408.62

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Level Workforce Strategy (Surplus and Shortage Allowed)

Lets take the same problem Lets take the same problem as before but this time use as before but this time use the Level Workforce strategy the Level Workforce strategy This time we will seek to use This time we will seek to use a workforce level of 6 a workforce level of 6 workers workers

Demand Beg. inv. Net req. Workers Production Ending inventory Surplus Shortage
ANDRE SUGIYONO

Jan 4,500 250 4,250 6 6,380 2,130 2,130

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Below are the complete calculations for the Below are the complete calculations for the remaining months in the six month planning horizon remaining months in the six month planning horizon
Jan 4,500 250 4,250 6 6,380 2,130 2,130 Feb 5,500 2,130 3,370 6 5,510 2,140 2,140 Mar 7,000 2,140 4,860 6 6,090 1,230 1,230 Apr 10,000 1,230 8,770 6 6,090 -2,680 2,680 May 8,000 -2,680 10,680 6 6,380 -1,300 1,300 Jun 6,000 -1,300 7,300 6 5,800 -1,500 1,500

Demand Beg. inv. Net req. Workers Production Ending inventory Surplus Shortage

Note, if we recalculate this sheet with 7 workers Note, if we recalculate this sheet with 7 workers we would have a surplus we would have a surplus
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Below are the complete calculations for the Below are the complete calculations for the remaining months in the six month planning remaining months in the six month planning horizon with the other costs included horizon with the other costs included
Jan 4,500 250 4,250 6 6,380 2,130 2,130 Feb 5,500 2,130 3,370 6 5,510 2,140 2,140 Mar 7,000 10 4,860 6 6,090 1,230 1,230 Apr 10,000 -910 8,770 6 6,090 -2,680 2,680 Jan $8,448 31,900 2,130 Feb $7,296 27,550 2,140 Mar $8,064 30,450 1,230 Apr $8,064 30,450 3,350
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May 8,000 -3,910 10,680 6 6,380 -1,300 1,300 May $8,448 31,900 1,625

Jun 6,000 -1,620 7,300 6 5,800 -1,500 1,500 Jun $7,680 29,000 1,875

Note, total Note, total costs under costs under this strategy this strategy are less than are less than Chase at Chase at $260.408.62 $260.408.62
$48,000.00 181,250.00 5,500.00 6,850.00

Labor Material Storage Stockout

$241,600.00 ANDRE SUGIYONO

The Graphical Approach to Aggregate Planning

Forecast the demand for each period Determine the capacity for regular time, overtime, and subcontracting, for each period Determine the labor costs, hiring and firing costs, and inventory holding costs Consider company policies which may apply to the workers or to stock levels Develop alternative plans, and examine their total costs
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Forecast and Average Forecast Demand

70
P d ctio ra p r w rkin d y ro u n te e o g a

60 50 40 30 20 10 0

Level production using average monthly forecast demand

Forecast Demand

Jan

Feb

Mar

Apr

May

Jun

22
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18

21
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21

22
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20

Cumulative Demand Graph for Plan 1

7,000 Cumulative Demand (Units) 6,000 5,000 4,000 3,000 2,000 1,000
Cumulative level production using average monthly forecast requirements Reduction of inventory

Cumulative forecast requirements Excess inventory

Jan Feb Mar Apr May Jun

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Controlling the Cost of Labor in Service Firms

Seek:
Close control of labor hours to ensure quick response to customer demand On-call labor resource that can be added or deleted to meet unexpected demand Flexibility of individual worker skills to permit reallocation of available labor Flexibility of individual worker in rate of output or hours of work to meet demand

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