1. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Alternatives Quarter 1 2 3 4 Total Capaci ty Unuse d Capaci ty Requirements Quarter Subcontract Overtime Regular time Subcontract Overtime Regular time Subcontract Overtime Regular time Subcontract Overtime Regular time Beginning inventory 1 2 3 4 Chapter 11 Aggregate Planning and Scheduling

2. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Managerial Inputs Figure 11.1 Supplier capabilities Storage capacity Materials availability Materials Current machine capacities Plans for future capacities Workforce capacities Current staffing level Operations New products Product design changes Machine standards Engineering Labor-market conditions Training capacity Human resources Cost data Financial condition of firm Accounting and finance Aggregate plan Customer needs Demand forecasts Competition behavior Distribution and marketing

3. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Aggregate Planning Objectives  Minimize Costs/Maximize Profits  Maximize Customer Service  Minimize Inventory Investment  Minimize Changes in Production Rates  Minimize Changes in Workforce Levels  Maximize Utilization of Plant and Equipment

4. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Aggregate Planning Strategies Possible Alternatives Strategyduring Slack Seasonduring Peak Season 1.Chase #1: vary workforceLayoffsHiring level to match demand 2.Chase #2: vary output Layoffs, undertime,Hiring, overtime, rate to match demand vacations subcontracting 3.Level #1: constant No layoffs, buildingNo hiring, depleting workforce level anticipation inventory, anticipation inventory, undertime, vacations overtime, subcontracting, backorders, stockouts 4.Level #2: constantLayoffs, building antici-Hiring, depleting antici- output rate pation inventory, pation inventory, over- undertime, vacations time, subcontracting, backorders, stockouts

5. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Aggregate Planning Process Figure 11.2 Determine requirements for planning horizon Identify alternatives, constraints, and costs Prepare prospective plan for planning horizon Move ahead to next planning session Implement and update the plan Is the plan acceptable? No Yes

6. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Aggregate Planning Costs  Regular-time Costs  Overtime Costs  Hiring and Layoff Costs  Inventory Holding Costs  Backorder and Stockout Costs

7. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Level Strategy for Services DockAisle Example 11.1 TIME PERIOD 123456Total Requirement*6121815131478 Current employment = 10 part-time clerks 1.No more than 10 new hires in any period 2.No backorders are permitted 3.Overtime can not exceed 20% of regular-time capacity 4.The following costs can be assigned: Regular-time wage$2,000/period at 20 hours/week Overtime wages150% of regular-time Hiring$1,000/person Layoffs$500/person * Number of part-time employees

8. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Level Strategy for Services DockAisle Example 11.1 TIME PERIOD 123456Total Requirement*6121815131478 Current employment = 10 part-time clerks 1.No more than 10 new hires in any period 2.No backorders are permitted 3.Overtime can not exceed 20% of regular-time capacity 4.The following costs can be assigned: Regular-time wage$2,000/period at 20 hours/week Overtime wages150% of regular-time Hiring$1,000/person Layoffs$500/person Peak Requirement 1.20 w = 18 employees in peak period w = = 15 employees 18 1.20

9. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Level Strategy for Services DockAisle Figure 11.3 TIME PERIOD 123456Total Requirement*6121815131478 Current employment = 10 part-time clerks 1.No more than 10 new hires in any period 2.No back orders are permitted 3.Overtime can not exceed 20% of regular-time capacity 4.The following costs can be assigned: Regular-time wage$2,000/period at 20 hours/week Overtime wages150% of regular-time Hiring$1,000/person Layoffs$500/person Peak Requirement 1.20 w = 18 employees in peak period w = = 15 employees 18 1.20

10. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Chase Strategy for Services DockAisle TIME PERIOD 123456Total Requirement*6121815131478 Current employment = 10 part-time clerks Example 11.2 * Number of part-time employees

11. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Chase Strategy for Services DockAisle TIME PERIOD 123456Total Requirement*6121815131478 Current employment = 10 part-time clerks Figure 11.4

12. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Mixed Strategies in Manufacturing Example 14.3 1.No beginning inventory or back orders in period 1 2.No stockouts or backlog extensions are permitted 3.Overtime cannot exceed 20% of regular-time capacity 4.The following costs can be assigned: Regular-time production$4,000/employee-period Overtime production150% of regular-time Hires$2,400/person Layoffs$400/person Inventory$40/employee-period/period Back orders$1,000/employee-period/period ACCOUNTING PERIOD 123456Total Requirement*24142220180136168870 Current employment = 120 workers Figure 11.5

13. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Gantt Charts Progress Chart Figure 11.9 Plymouth Ford Pontiac Job4/204/224/234/244/254/264/214/174/184/19 Key Start activity Finish activity Scheduled activity time Actual progress Nonproductive time

14. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Gantt Charts Progress Chart Plymouth Ford Pontiac Job4/204/224/234/244/254/264/214/174/184/19 Current date Figure 11.9

15. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Scheduling Services DayMTWThFSSu Number of employees648910*32 Required employees Example 11.4

16. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Scheduling Services DayMTWThFSSu Requirement20345*21 Employee6XXXXX Requirement20234*10 Employee7XXXXX Requirement10123*10 Employee8XXXXX Requirement00012*10 Employee9XXXXX Requirement00001*00 Employee10XXXXX Required employees Example 11.4

17. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Scheduling Services DayMTWThFSSu Employee1XXXXX offoff Employee2XXXXX offoff Employee3XXXXX offoff Employee4 offoff XXXXX Employee5XXXXX offoff Employee6 offoff XXXXX Employee7XXXXX offoff Employee8XXXXX offoff Employee9 off XXXXX off Employee10XXXXX offoff Final Schedule Example 11.4

18. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice Hall, Inc. All rights reserved. Scheduling Services DayMTWThFSSu Employee1XXXXX offoff Employee2XXXXX offoff Employee3XXXXX offoff Employee4 offoff XXXXX Employee5XXXXX offoff Employee6 offoff XXXXX Employee7XXXXX offoff Employee8XXXXX offoff Employee9 off XXXXX off Employee10XXXXX offoff Final Schedule DayMTWThFSSu TOTAL Capacity, C771010103250 Requirements, R6489103242 Slack, C – R13210008 Example 11.4