Category Archives: Aggregate Planning

Problems (Aggregate Planning)

Problems (Aggregate Planning) I. Develop a production plan and calculate the annual cost for a firm whose unit demand forecast is fall. 10,000; winter, 8,000; spring. 7,000; summer, 12,000. Inventory at the beginning of fall is 500 units. At the beginning of fall you currently have 30 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you h

Review and Discussion Questions

Review and Discussion Questions 1. What are the basic controllable variables of ~ production planning problem? What are the four major costs? 2. Distinguish between pure and mixed strategies in production planning. 3. Compare the best plans in the C&A Company and the Tucson Parks and Recreation Department. What do they have in common? 4. How does forecast accuracy relate. in general, to the practical applicatio


Conclusion Aggregate planning provides the link between the corporate strategic and capacity plans and workforce size, inventory quantity. and production levels. It does not involve detailed planning. It is also useful to point out some practical consideration – in aggregate planning. First, demand variations are a fact of life, so the planning system must include sufficient flexibility to cope with such vari

Pres old Capacity

Pres old Capacity A final requirement for the successful implementation of yield management is that the lowerpriced capacity can be sold in advance. This limits the availability of capacity to the high erpriced market segments. As an illustration, hotels usually work with conference planners several years in advance of a conference, offering a given number of rooms at the lowest room rates. Travel groups usually pl

Product Perishability

Product Perishability The underlying reason that yield management can be applied to many types of services is the perishability of service capacity. In other words, service capital cannot be saved for future use. (Wouldn’t it be great if the airlines could save all of their empty seats during the year for use during the Thanksgiving and Christmas holiday periods! I Given that capacity in a service operation

High-Fixed and Low- Variable Costs

High-Fixed and Low- Variable Costs High-fixed and low-variable co ts allow a firm to offer significant discounts while still being able to cover variable costs. When a service firm has this type of cost profile, profits are directly related to sales. In other words, the more sales generated. the more profits made. For example, if the variable cost associated with having a hotel room cleaned is estimated at $25 (w


YIELD MANAGEMENT AT NATIONAL CAR RENTAL Faced with possible liquidation in 1993 by General Motors, its parent company, National Car Rental was under significant pressure to produce both a substantial and sustainable profit. To accomplish this, management decided to adopt a comprehensive revenue management system. Instead of a constant car rental price all the time, the revenue management system demonstrated that a

signs, Symbols, and Artifacts

signs, Symbols, and Artifacts These refer to aspects of the service operation that have social significance, For example, bank buildings often include columns and stone to gave the feeling of security. The offices of large law firms and consulting practices frequently are done in dark woods and thick carpets to connote success and traditional values  waters in tuxedos and waiters in white shirts. hats, and apro

Yield Management

Yield Management Aggregate planning in services is very different from that in manufacturing. This is due, in large part, to the fact that the capacity of service operations is often viewed as highly perishable  because it cannot be saved or inventoried for future use. For example, the empty seats in a restaurant on Monday morning cannot be saved for use on Saturday night when  it is very busy. Thus. services d

Aggregate Planning Applied to Services: Tucson Parks and Recreation Department

Aggregate Planning Applied to Services: Tucson Parks and Recreation Department  Charting and graphic techniques are also very useful for aggregate planning in service applications. The following example shows how a city’s parks and recreation department  could use the alternatives of full-time employees. part-time employ and. ubcontractingto meet its commitment to provide service to the city. The Tucson P