Scm Ch12

Topics: Supply and demand, Costs, Cost Pages: 3 (769 words) Published: March 24, 2013
Chapter 12
A term that refers to the process that helps companies keeps demand and supply in balance. The terminology is meant to capture the importance of cross-functional work. Includes:
Provide better customer service
Lower inventory
Shorten customer lead times
Stabilize production rates
Give top management a handle on the business

2. Aggregate on Supply side- done by product family
Aggregate on Demand side- done by groups of customers

Aggregate operation plan – the form are varies from company to company (In smaller company, the owner may make simple calculations of workforce needs that reflect a general staffing strategy) Main purpose of aggregate plan: Specify the optimal combination of production rate, workforce level, and inventory on hand Techniquescut and try approach: involves costing out various production planning alternatives and selecting the one that is the best

3. The time dimension is shown as long, intermediate, and short range. LONG-RANGE PLANING is done annually, focusing on a horizon greater than one year. (Design of manufacturing and service processes, design of the logistic activities) INTERMEDIATE-RANGE PLANNING usually covers a period from 3 to 18 months, with weekly, monthly, or sometimes quarterly time increments. (Forecasting and demand management and sales and operations planning) SHORT-RANGE PLANNING covers a period from one day to six months, with daily or weekly time increments. (Focused on scheduling production and shipment orders)

4. Production rate: the no. of units completed per unit of time (eg. per hour or per day) Workforce level: the no. of workers needed for production (Production = production rate X workforce level) Inventory on hand: unused inventory carried over from the previous period

2 approach of planning:
1. Contains a section on manufacturing that specifies how many units in each major product line need to be produced over the next 12 months to...
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