MGT 215 Assignment 4 Benjamin
Erik Benjamin
Student ID 5255640
MGT 215
Operations, Logistics and Supply Chain Management
Assignment 4
(1) Why are mathematical models not more widely used in aggregate planning?
In the text, aggregate planning also known as aggregate scheduling is defined as an approach to determine the quantity and timing of production for the intermediate future, often from 3 to 18 months ahead (Heizer and Render, 2005). Operations managers use aggregate planning as a forecasting method to identify what adjustments are needed in production, labor requirements, inventory, overtime, etc. For example, a company has to plan ahead to manufacture products that are in demand for a particular season. If there is a demand for that product the company will see an increase in sales but if there is a low demand during that period of time the company can take a significant loss. So, it’s important for operation managers to develop a forecast plan that will address the demand at a minimum cost to the company. There are different aggregate planning methods that are useful to operation managers. Graphical and charting techniques are popular techniques because they are easy to use (Heizer and Render, 2005). Operation managers are able to look at comparable forecasted demands against the current capacity. Because of the easy use, it’s a trial and error approach that doesn’t require much computation to complete. Operation managers can look at the graphs and charts to make a decision on production, labor, and inventory in order to meet the demands. The mathematical models are a lot different than other models; it’s not trial and error and more complex. The reason mathematical models are not more widely used in aggregate planning is because due to the amount of time it takes to develop the model. Secondly, it takes a person that understands the process to develop the model. Third, a company may need to hire someone with the expertise to develop the model.
Student ID 5255640
MGT 215
Operations, Logistics and Supply Chain Management
Assignment 4
(1) Why are mathematical models not more widely used in aggregate planning?
In the text, aggregate planning also known as aggregate scheduling is defined as an approach to determine the quantity and timing of production for the intermediate future, often from 3 to 18 months ahead (Heizer and Render, 2005). Operations managers use aggregate planning as a forecasting method to identify what adjustments are needed in production, labor requirements, inventory, overtime, etc. For example, a company has to plan ahead to manufacture products that are in demand for a particular season. If there is a demand for that product the company will see an increase in sales but if there is a low demand during that period of time the company can take a significant loss. So, it’s important for operation managers to develop a forecast plan that will address the demand at a minimum cost to the company. There are different aggregate planning methods that are useful to operation managers. Graphical and charting techniques are popular techniques because they are easy to use (Heizer and Render, 2005). Operation managers are able to look at comparable forecasted demands against the current capacity. Because of the easy use, it’s a trial and error approach that doesn’t require much computation to complete. Operation managers can look at the graphs and charts to make a decision on production, labor, and inventory in order to meet the demands. The mathematical models are a lot different than other models; it’s not trial and error and more complex. The reason mathematical models are not more widely used in aggregate planning is because due to the amount of time it takes to develop the model. Secondly, it takes a person that understands the process to develop the model. Third, a company may need to hire someone with the expertise to develop the model.