TI-3003

Perencanaan dan Pengendalian Produksi

Aggregat Planning

Laboratorium Sistem Produksi

www.lspitb.org
2012

2005 McGraw-Hill/Irwin
3-2

Tahapan PPC
Strategic
planning

Peramalan

Perencanaan
Agregat

Capacity Planning

Jadwal Produksi Induk

Rough Cut
Capacity
Planning
(RCCP)

Perencanaan
Material

Capacity
Requirement
Planning
(CRP)

Order
Pembelian

Jadwal
Produksi

Penjadwalan
Ulang

Outsourcing
Pengendalian Aktivitas Produksi di
Lantai Pabrik

2005 McGraw-Hill/Irwin
3-3

Aggregate Units of Production

Satuan atau unit mewakili semua item produk yang diproduksi
Satuan aggregate dapat dipergunakan untuk
menentukan/memperkirakan kebutuhan pengoperasian fasilitas
produksi
Contoh :

PT Krakatu Steel
aggregate unit adalah ton

baja
PT Chandra Asri
aggregate unit adalah ton
petro-kimia
PT Toyota Indonesia Motor Manufacturing

aggregate unit adalah unit kendaraan
PT IBM
aggregate unit adalah unit
komputer
City bank
aggregate unit adalah Rp atau

2005 McGraw-Hill/Irwin
3-4

Contoh : product lines dari Sony

2005 McGraw-Hill/Irwin
3-5

Product lines of Unilever

2005 McGraw-Hill/Irwin
3-6

Siemens Product/Service Lines

Industry
Motors and Drives
AutomationBuilding
Technologies
Mobility
Lighting (OSRAM)
Energy
Power Generation
Power Transmission
Power Distribution
Automation, Controls, Protection
& Electrical
Compression, Expansion &
Ventilation
Mechanical DrivesServices

Healthcare
Diagnostic Imaging and Therapy
Laboratory Diagnostics
Hearing Instruments

Customer Products
Cordless Phones and Home
Media
Electrical Installation Systems
Hearing Instruments
Home Appliances
Home Security
Home Automation
Lighting (OSRAM)

2005 McGraw-Hill/Irwin
3-7

Contoh
Plant manager bertanggung jawab pada produksi mesin cuci electrolux
ingin menetapkan unit aggregate untuk menyusun perencanaan
produksi. Berikut karacteristik dari mesin cuci yang diproduksi:

Model

Number of workerhours required to

produce (hours/unit)

Selling price
(US$/unit)

Percentages of
total number of
sales

M3380

5.8

725

6%

M2624

5.4

525

10%

L3800

5.2

425

14%

L9898

5.1

395

17%

K4242

4.9

345

21%

A5532

4.2

285

32%

Production Planning Environment

Competitors
Behavior

External
Capacity
(outsourcing)
Current
Physical
Capacity

Raw Material
Availability

Market
Demand

Planning
for
Production

Economic
Conditions

Current
Inventory

Current
Work Force

Required
Production
Activities

Planning Production
Long-range plan (3-10 years) updated yearly
Inputs: aggregate forecasts (units) and current plant
capacity (hours)
Decision: build new plant, expand an existing plant,
create new product line, expand, contract, or delete
existing product lines
Level of detail: Very Aggregated
Degree of uncertainty: High

Planning Production
Intermediate-range plan (6 month 2 years)
updated quarterly
Inputs: aggregate capacity and product decisions from
the long-term plan, units are aggregated by product
line or family and plant department
Decision: changes in work force, additional machines,
subcontracting, overtime
Level of detail: Aggregated
Degree of uncertainty: Medium

Planning Production
Short-range plan (1 week 6 month) updated
daily or weekly
Inputs: decisions from the intermediate-term plan, units
are aggregated by particular product and capacity
available hours on a particular machine, short range
forecast, inventory levels, work force levels, processes
Decision: overtime and undertime, possibility of not
fulfilling all demand, subcontracting, delivery dates for
suppliers, product quality
Level of detail: Very Detailed
Degree of uncertainty: Low

Production Planning Example

Small company makes one product plastic cases to hold CDs.
Two different types of mold are used to produce top & bottom.
Two halves are manually put together, placed in the boxes &
shipped.
The injection molding machines can make 550 pieces per hour.
A worker can finish 55 cases in 1 hour (10 workers / machine)
Forecasts of demand: 80,000 cases per month for next year
at 4
weeks/month the demand should be 20,000 cases per week.
Company runs 5 out of 7 days per week: 4,000 cases per day
needed.
Each worker can not work more than 8 hours per day
4,000/8 = 500 pieces per hour have to be produced.
Plan: 1 machine, 10 workers, 8 hours/day, 5 days/week

Introduction to Aggregate Planning

Constant production rate can be satisfied with constant
capacity.
Work force is constant, production rate slightly less that
capacity of people & machines: good utilization without
overloading the facilities.
Raw material usage is also constant.
If supplier and customers are also close, frequent deliveries
of raw material and finished goods will keep inventory low.
How realistic is this example?
Strategies to cope with fluctuating demand?
-- change the demand
-- produce at constant rate anyway
-- vary the production rate -- use combination of above strategies

Introduction to Aggregate Planning:

Influencing Demand
Do not satisfy demand during peak periods
Capacity < Peak demand , constant production rate
Loss of some sales
Japanese car manufacturers often take this stance
Determine percentage of the market share
Constant production is set at this level
Sales personal expected to sell produced amount

Ease of planning must be compared to lost revenue

Introduction to Aggregate Planning:

Influencing Demand
Shift demand from peak periods to non-peak
periods / create new demand for non-peak
periods
Creating new demand can be done through advertising or
incentive programs (automobile industry: rebates; telephone
companys differential pricing system)
Smoothing demand

Introduction to Aggregate Planning:

Influencing Demand
Produce several products with peak demand
in different periods
Products should be similar, so that
manufacturing them is not too different
Snowmobiles and jetskis same engines, similar
body work
Lawn-mowers snowblowers; baseball football
equipment

Medium Range Planning:

Aggregate Production Planning
Establish production rates by major product
groups
by labor hours required or units of production

Attempt to determine monthly work force size and

inventory levels that minimizes production related
costs over the planning period (for 6-24 month)

Relevant Costs Involved

Regular time costs
Costs of producing a unit of output during regular working hours,
including direct and indirect labor, material, manufacturing expenses

Overtime costs
Costs associated with using manpower beyond normal working hours

Production-rate change costs

Costs incurred in substantially altering the production rate

Inventory associated costs

Out of pocket costs associated with carrying inventory

Costs of insufficient capacity in the short run

Costs incurred as a result of backordering, lost sales revenue, loss of
goodwill + costs of actions initiated to prevent shortages

Control system costs

Costs of acquiring the data for analytical decision, computational effort
and implementation costs

Aggregate Units
The method is based on notion of aggregate units.
They may be

Actual units of production

Weight (tons of steel)
Volume (gallons of gasoline)
Dollars (value of sales)
Fictitious aggregate units

Overview of the Problem

D1, D2, . . . , DT - the forecasts of demand for aggregate
units over the planning horizon (T periods)
Determine:

Wt - work force levels

Pt - production levels
It inventory levels
Ht number of workers hired in this period
Ft number of workers fired in this period
Ot overtime production in units
Ut undertime, worker idle time in units
St number of units subcontracted from outside

to minimize total costs over the T period planning horizon

Example of fictitious aggregate units:

One plant produced 6 models of washing machines:
Model
A 5532
K 4242
L 9898
L 3800
M 2624
M 3880

# hrs.
4.2
4.9
5.1
5.2
5.4
5.8

Price
285
345
395
425
525
725

% sales Price/#hours
67.86
32
70.41
21
77.45
17
81.73
14
97.22
10
125.0
06

Question: How do we define an aggregate unit here?

Example (continued)
Notice: Price is not necessarily proportional to
worker hours (i.e., cost): why?
One method for defining an aggregate unit:
0.32(4.2) + 0.21(4.9) + 0.17(5.1) + 0.14(5.2) +
0.10(5.4) + 0.06(5.8) = 4.856 worker hours
Forecasts for demand for aggregate units can be
obtained by taking a weighted average (using the
same weights) of individual item forecasts.

Example (continued)
The washing machine plant is interested in
determining work force and production levels for the
next 8 months
Forecasted demands for Jan-Aug. are:
420, 280, 460, 190, 310, 145, 110, 125
Starting inventory at the end of December is 200
and the firm would like to have 100 units on hand at
the end of August
Find monthly production levels

Step 1: Determine net demand.

(subtract starting inventory from period 1 forecast and add
ending inventory to period 8 forecast)

Month
1(Jan)
2(Feb)
3(Mar)
4(Apr)
5(May)
6(June)
7(July)
8(Aug)

Forecasted
Demand
420
280
460
190
310
145
110
125

Net Predicted
Demand
420-200=220
280
460
190
310
145
110
125+100=225

Cum. Net
Demand
220
500
960
1150
1460
1605
1715
1940

Starting inventory - 200 and final inventory - 100

units

Step 2. Graph Cumulative Net Demand

to Find Plans Graphically

Draw a straight line from first

point 220 to 1940 units in
month 8: The slope of the line is
the number of units to produce
each month.

Determine a production plan that doesnt change the size of the

workforce over the planning horizon. What to do?

Constant Workforce Plan (zero ending inv)

2000

Monthly Production =

1500

= 1940 / 8 = 242.5

1000
500

(rounded to 243/month)

Demand is backlogged

0
1

Any shortfalls in this solution?

How can we have a constant work force plan

with no stockouts?
Using the graph, find the straight line that goes
through the origin and lies completely above the
cumulative net demand curve:
Constant work force plan with no stockouts
3000
2500
2000
1500
1000
500
0
0

From the previous graph, we see that cum. net demand

curve is crossed at period 3, so that monthly production is
960/3 = 320. Ending inventory each month is found from:
Month Constant
Cum.
Net.
Dem.
Cum.
Prod.
Invent.
work
force
plan with
no stockouts
1(Jan)
220
320
100
3000
2(Feb)
500
640
140
2500
3(Mar)
960
960
0
2000 4(Apr.)
1150
1280
130
1500 5(May)
1460
1600
140
1000 6(June)
1605
1920
315
1715
2240
525
500 7(July)
1940
2560
620
0 8(Aug)
0

However
This solution may not be realistic for several
reasons:
It may not be possible to achieve the production
level of 320 unit/mo with an integer number of
workers
Since all months do not have the same number
of workdays, a constant production level may not
translate to the same number of workers each
month
Some thoughts:
Final inventory is 620 units, not 100 units
Cost of carrying inventory in each period

Production Strategies:
Constant production rate with Zero
inventory
stockouts
carrying inventory

Constant production rate with no stockouts

carrying inventory
extra inventory at the period T

Mixed strategy
few changes in the workforce allowed
more flexibility
lower costs

Example #2 (based on example #1)

The plant has 38 workers who produced 630
units in a period of 40 days
K= 630/(38*40) = 0.414
average number of
units produced by one worker in one day
Assume we are given the following # working
days per month:
jan 22
apr 20
jul
18
feb 16
may 21
aug 10
mar 23
jun 17

Constant Work Force Production Plan:

38 workers, K= .414
Month
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug

# wk
days Dem
22 220
16 280
23 460
20 190
21 310
22 145
21 110
22 125
+100

Prod. Cum
Level Prod
346
346
252
598
362
960
315
1275
330
1605
346
1951
330
2281
346
2627

Cum Nt
Dem
220
500
960
1150
1460
1605
1715
1940

End Inv
126
98
0
125
145
346
566
687

Addition of Costs

Holding Cost (per unit per month):

Hiring Cost per worker:
Firing Cost per worker:
Payroll Cost ( per worker/day):
Shortage Cost (unit short/month):

$
8.50
$ 800.00
$ 1,250.00
$
75.00
$
50.00

Cost Evaluation of Constant Work Force

Plan
Assume that the work force at end of Dec was 32
Cost to hire 6 workers: 6*800 = $4,800
Inventory Cost
accumulate ending inventory:
(126+98+0+125+145+346+567+687) = 2,095
(100 units at the end of the august in included in 687 units
inventory)
Hence Inventory Cost = 2095*8.5=$17,809.37
Payroll cost:
($75/worker/day)(38 workers )(167days) = $475,950
Cost of plan:
$475,950 + $17,809.37 + $4800 = $498,559.37

Cost Reduction in Constant Work Force Plan

In the original cum net demand curve, consider
making reductions in the work force one or more
times over the planning horizon to decrease
inventory investment.
2000

1500

1000

500
Cum Dem
0
1

Cost Evaluation of Modified Plan with

One Workforce Adjustment:
The modified plan calls for
hiring 6 workers in Jan (to 38)
reducing the workforce to 23 (from 38) at start of April

cost of hiring is
$ 4,800.00
$ 4,800.00
cost of layoffs is
$ 18,750.00 $
0.00
payroll cost is
$ 356,700.00 $ 475,950.00
holding costs are
$ 2,528.93 $ 17,809.37
shortage costs are
$ 7,770.40 $
0.00
The total cost of the modified plan is $ 390,548.33
$ 498,559.37
Original plan had cost of

Cost Evaluation of Modified Plan with Two

Workforce Adjustment:
2000

The modified plan calls for

hiring 6 workers in January
firing 8 workers at start of April
firing 12 workers at start of June
Two

cost of hiring is
$ 4,800.00
cost of layoffs is $ 25,000.00
payroll cost is
$ 353,850.00
holding costs are $ 3,452.87
shortage costs are $
0.00
The total cost :
$ 387,102.87

1500

1000

500
Cum Dem
0
1

One

$ 4,800.00
$ 18,750.00
$ 356,700.00
$ 2,528.93
$ 7,770.40
$ 390,548.33

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug

# wk
days Dem
22 220
16 280
23 460
20 190
21 310
22 145
21 110
22 125
+100

Prod. Cum
Level Prod
346
346
252
598
362
960
315
1275
330
1605
346
1951
330
2281
346
2627

Cum Nt
Dem
220
500
960
1150
1460
1605
1715
1940

None

$ 4,800.00
$
0.00
$ 475,950.00
$ 17,809.37
$
0.00
$ 498,559.37

Constant Work Force Production Plan:

38 workers, K= .414
Month

End Inv
126
98
0
125
145
346
566
687

Cost Reduction in Constant Work Force Plan

2000

1500

1000

500
Cum Dem
0
1

Zero Inventory Plan (Chase Strategy)

Idea:
change the workforce each month in order to match the
workforce with monthly demand as closely as possible
This is accomplished by computing the # units produced by
one worker each month (by multiplying K by #days per
month)
Then take net demand each month and dividing by this
quantity. The resulting ratio is rounded up and possibly
adjusted downward.

At the end of December there are 32 workers

Period
1
2
3
4
5
6
7
8

# hired

#fired
7

17
6

Cost of this
plan:
$461,732.08

25
13
20
4
13

Hybrid Strategies
Use a combination of options:
Build-up inventory ahead of rising demand & use backorders
to level extreme peaks
Finished goods inventories: Anticipate demand
Back orders & lost sales: Delay delivery or allow demand to
go unfilled
Shift demand to off-peak times: Proactive marketing

Overtime: Short-term option

Pay workers a premium to work longer hours

Hybrid Strategies
Undertime: Short-term option
Slow the production rate or send workers home early (lowers
labor productivity, but doesnt tie up capital in finished good
inventories)
Reassign workers to preventive maintenance during lulls

Subcontracting: Medium-term option

Subcontract production or hire temporary workers to cover
short-term peaks

Hire & fire workers: Long-term option

Change the size of the workforce
Layoff or furlough workers during lulls

Another APP Example

Quarter
Spring
Summer
Fall
Winter

Sales Forecast (lb)

80,000
50,000
120,000
150,000

_________________________
Hiring cost = $100 per worker
Firing cost = $500 per worker
Inventory carrying cost = $0.50 per pound per quarter
Production per employee = 1,000 pounds per quarter
Beginning work force = 100 workers

Level Production Strategy

Sales Production
Quarter Forecast Plan
Inventory
Spring 80,000 100,000
20,000
Summer 50,000 100,000
70,000
Fall
120,000 100,000
50,000
Winter 150,000 100,000
0
400,000
140,000
Cost = 140,000 pounds x 0.50 per pound = $70,000

Chase Demand Strategy (Zero Inventory)

Hiring cost = $100 per worker;
Firing cost = $500 per worker
Inventory carrying cost = $0.50 per pound per quarter
Production per employee = 1,000 pounds per quarter
Beginning work force = 100 workers
Quarter
Spring
Summer
Fall
Winter

Sales Production Workers

Forecast
Plan
Needed
80,000
80,000
80
50,000
50,000
50
120,000 120,000
120
150,000 150,000
150

Workers Workers
Hired
Fired
20
30
70
30
100
50

Cost = (100 workers hired x $100) + (50 workers fired x $500)

= $10,000 + 25,000 = $35,000

APP By Linear Programming

Min Z = $100 (H1 + H2 + H3 + H4) + $500 (F1 + F2 + F3 + F4)+
$0.50 (I1 + I2 + I3 + I4)
Subject to
where
Ht = # hired for period t
P1 - I1 = 80,000
(1) Demand
F
t = # fired for period t
I1 + P2 - I2 = 50,000
(2) constraints
It = inventory at end
I2 + P3 - I3 = 120,000
(3)
of period t
Wt = workforce at period t
I3 + P4 - I4 = 150,000
(4)
Pt = # units produced at
P1 - 1,000 W1 = 0
(5) Production
period t
P2 - 1,000 W2 = 0
(6) constraints
P3 - 1,000 W3 = 0
(7)
P4 - 1,000 W4 = 0
(8)
W1 - H1 + F1 = 100 (9) Work force
W2 - W1 - H2 + F2 = 0
(10) constraints
W3 - W2 - H3 + F3 = 0
(11)
W4 - W3 - H4 + F4 = 0
(12)

Optimal Solutions to Aggregate Planning

Problems Via Linear Programming
Dt the forecasts of demand for aggregate units for period t, t = 1 T
nt number of units that can be made by one worker in period t
CtP
cost to produce one unit in period t
W
cost of one worker in period t
Ct
H
Ct
cost to hire one worker in period t
known info
CtL
cost to layoff one worker in period t
CtI cost to hold one unit in inventory in period t
CtB
cost to backorder one unit in period t
Wt number of workers available in period t
decision variables
Pt number of units produced in period t
It number of units held in the inventory at the end of period t
Ht number of workers hired in period t
Ft number of workers fired in period t

Optimal Solutions to Aggregate Planning

Problems Via Linear Programming

LP: max or min f ( x )

s.t constraints

All variables are continuously divisible is it a

problem?
Solution:

Produce 214.5 of aggregated units

Hire 56.38 workers

IP: max or min f ( x )

s.t constraints*
Some variables are continuously divisible, some
are real number only problem?

Linear Programming:
Objective
Function and Constraints
T
min

(C
t =1

P
t

Pt + C tW Wt + C tH H t + C tL Lt + C tI I t + C tB Bt

production

salary

hiring

Pt ntWt ,

s.t.

Wt = Wt 1 + H t Lt ,

layoffs inventory backlogs

t = 1, 2, K, T production
constraint

t = 1, 2,K , T

labour
constraint

I t Bt = I t 1 Bt 1 + Pt Dt , t = 1, 2,K , T inventory

constraint

Pt , Wt , H t , Lt , I t 0,

t = 1, 2,K , T

Number of constraints is 3T, number of unknown is 5T

W0, I0, B0 initial workforce, initial inventory/backlog

Linear Programming: Product Mix Planning

Multiple products processed on various workstation
i an index of product, i = 1, , m
j an index of workstation, j = 1, , n
t an index of period, t = 1, , T
Dit the maximum demand for product i for period t
dit the minimum sales allows of product i for period t
aij time required on workstation j to produce one unit of product i
cjt capacity of workstation j in period t in the same units as aij
ri net profit from one unit of product i
hi cost to hold one unit of product i for one period in the inventory
Xit amount of product i produced in period t
Sit amount of product i sold in period t
Iit number of units of product i held in the inventory at the end of
period t

Linear Programming: Product Mixed Planning

Objective Function and Constraints
T

max (ri S it hi I it )
t =1 i =1

profit
inventory
d it S it Dit ,

for all i, t

sales
constraint

X it c jt ,

for all j , t

capacity
constraint

I it = I it 1 + X it S it ,

for all i, t

inventory
constraint

a
s.t.

i =1

ij

X it , S it , I it 0,

for all i, t

This model can be used to obtain information on

demand feasibility
bottleneck location product mix

Product Mix Planning

Demand feasibility
Determine if the set of demands is capacity-feasible
If Sit=Dit then demand is feasible, otherwise demand is infeasible
If could not find a feasible solution, then lower bound dit is too high
for a given capacity
m

Bottleneck locations

a X
i =1

ij

it

c jt ,

for all j , t

Constraints restrict production on each workstation in each period

Observe binding constraints to determine which workstations limit
capacity
Consistently binding workstation is a bottleneck
Require close management attention

Product mix
If capacity is an issue, then model will try to maximize revenue by
utilizing products with high net profit

Homework Assignment
Read chapter 3, sections 1 4
Problems:
3.5
3.9 3.11
3.14 3.16

References
Presentations by McGraw-Hill/Irwin and Wilson,G.R.
Production & Operations Analysis by S.Nahmias
Factory Physics by W.J.Hopp, M.L.Spearman
Inventory Management and Production Planning and
Scheduling by E.A. Silver, D.F. Pyke, R. Peterson
Production Planning, Control, and Integration by D.
Sipper and R.L. Bulfin Jr.

2005 McGraw-Hill/Irwin
3-56

Aggregate PlanningModelling Management Behavior

Bowman Model

Work-force
Wt = jumlah tenaga kerja pada periode t
Ft = jumlah demand hasil ramalan pada periode t
I* = tingkat inventory yang diinginkan
It-1= tingkat inventory pada periode t-1
f = fungsi
Wt = f(Ft, I*, It-1 , Wt-1)
Contoh :

W t = 0 + 1W t 1 + 2 ( I * I t 1 ) + 3 Ft

= koefisien manajemen (Ditentukan dari data empirik)

56

56

2005 McGraw-Hill/Irwin
3-57

Management Coefficient Model(2)

Production level
Pt = tingkat produksi pada periode t
Pt = g(Wt, I*, It-1, Ft, Ft+1, Ft+2,)

Contoh :

Pt = 0 + 1Wt + 2 ( I I t 1 ) + {[1 /(i + 1)]Ft +1}

*

i =0

= koefisien manajemen

57

57

2005 McGraw-Hill/Irwin
3-58

Contoh data empirik (Bedworth, page 128)

2

Ft

It-1

200
210
240
300
250
200
160
150
100
120
160
200
220
230
260
350
270
230
200
280
150
170
200
250
260
270

30
48
60
27
50
49
65
72
95
97
55
31
47
68
77
27
55
65
102
100
129
134
108
70

Wt

Pt

Pr,t

Po,t

I*-It-1

i= 0

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

27
25
28
28
28
25
22
20
18
18
18
20
22
28
30
33
33
30
30
22
22
22
22
22

209
230
250
270
270
200
175
160
120
120
120
180
200
250
270
300
300
240
240
176
176
176
176
176

200
200
224
224
224
200
175
160
120
120
120
160
176
224
240
266
266
240
240
176
176
176
176
176

9
30
26
46
46
0
0
0
0
0
0
20
24
26
30
34
34
0
0
0
0
0
0
0

20
2
-10
23
0
1
-15
-22
-45
-47
-5
19
3
-18
-27
23
-5
-15
-52
-50
-79
-84
-58
-20

1
F

1 + i

t+ i

385
430
473
491
403
330
268
240
213
266
333
386
421
476
525
561
451
423
390
411
301
353
411
470

58 58

2005 McGraw-Hill/Irwin
3-59

Management Coefficient Model(3)

Contoh coefisient management (detail ada di buku Bedworth halaman
134-135)

Wt = 1,49 + 0,503Wt 1 0,02( I * I t 1 ) + 0,49 Ft

= 0,9322
2

Pt = 63,2 + 9,62Wt + 1,32( I I t 1 ) + 0,095 {[1 /(i + 1)]Ft +1}

*

= 0,9757

59

i =0

59