TAILIEUCHUNG - Lecture Operations and supply chain management: The Core (3/e) – Chapter 8: Sales and operations planning

The main goals of this chapter are to: Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans; construct aggregate plans that employ different strategies for meeting demand; describe what yield management is and why it is an important strategy for leveling demand. | Sales and Operations Planning Chapter 08 McGraw Hill Irwin Copyright 2013 by The McGraw Hill Companies Inc. All rights reserved. Learning Objectives 1. Understand what sales and operations planning is and how it coordinates manufacturing logistics service and marketing plans. Construct aggregate plans that employ different strategies for meeting demand. Describe what yield management is and why it is an important strategy for leveling demand. 8 2 What is Sales and Operations Planning Sales and operations planning is a process that helps firms provide better customer service lower inventory shorten customer lead times stabilize production rates and give top management a handle on the business The process consists of a series of meetings finishing with a high-level meeting where key intermediate-term decisions are made This must occur at an aggregate level and also at the detailed individual product level By aggregate we mean at the level of major groups of products 8 3 Sales and Operations Planning Activities - Overview 8 4 Types of Planning 8 5 Aggregate Operations Plans Specifies the optimal combination of Production rate units completed per unit of time Workforce level number of workers needed in a period Inventory on hand inventory carried from previous period Product group or broad category aggregation This planning is done over an intermediate-range planning period of 3 to18 months Excel Aggregate Pla 8 6 Production Planning Environment In general the external environment is outside the production planner s direct control In some firms demand can be managed Complementary products work for firms facing cyclical demand fluctuations With services cycles are more often measured in hours than months 8 7 Production Planning Strategies Production planning strategies are the plans for meeting demand. Tradeoffs involved include workers employed work hours inventory and shortages. A pure strategy uses just one of these approaches a mixed strategy uses two or more 8 8 .

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