Management Science II Dr.T.T.

Narendran

MODULE 3

Production Planning And Control

Inter Relationships Of Production Planning And Control

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Aggregate Production Planning (APP)

Aggregate Planning Guidelines

• Formulate output plans that adjust production activities to provide a
rational response to demand

• Determine corporate policies regarding controllable variables

• Use a good forecast as the basis for planning

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Management Science II Dr.T.T.Narendran

• Plan in appropriate units of capacity

• Maintain as stable a work-force as possible

• Maintain as much inventory control as needed

• Maintain as mush flexibility as possible

• Respond to demand fluctuations in a controlled manner

• Evaluate planning adequacy on a regular basis

Aggregate Planning

• Plans a desired output over a time-range

Pure Aggregate Planning Strategies

• Work-force
• Overtime / idle time
• Inventories
• Back-orders
• Subcontracting
• Adjusting plant capacity

App

• Each strategy has associated costs

• Usually mixed strategies are adopted

• Master Scheduling

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Management Science II Dr.T.T.Narendran

• Translates end-product requirements to materials and capacity

requirements

Materials Planning Capacity Planning

What materials ? Concerns labour and machinery

When are they required ? What ?

How much ? When ?

How much ?

Capacity plan ascertains if schedule is feasible

Aggregate Production Planning

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Aggregate Production Planning

Aggregate Production Planning

Objective Function
Minimize
T
Z = ∑ ( pt qt + CRt LRt + COt LOt + ct lt + bt St + clt lt + + clt 'lt − )
t =1

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Aggregate Production Planning

C o n strain ts

R elatio n sh ip b etw een

n et in ven to ry N I an d t-1 an d t

N I t = N I t −1 + q t − d t

Aggregate Production Planning

C o n s tra in ts

W o rk fo rc e C h a n g e s

L R t = L R (t−1) + lt + − lt −

Aggregate Production Planning

• All decision Variables > 0
• Other Possible Constraints are on
• Upper limit on maximum change in work force level
• Upper limit on scheduled overtime
• Upper limit on maximum backlog

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Filename: CHAPTER 5
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Title: INTER RELATIONSHIPS OF PRODUCTION
PLANNING AND CONTROL
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