Chapter 14 sales and capacity planning. This chapter includes contents: The sales and operations planning process, strategies for adjusting capacity, strategies for managing demand, quantitative techniques for aggregate planning, hierarchical nature of planning, aggregate planning for services.
OPERATIONS MANAGEMENT: Creating Value Along the Supply Chain, Canadian Edition Robert S Russell, Bernard W Taylor III, Ignacio Castillo, Navneet Vidyarthi § CHAPTER 14 Sales and Capacity Planning § Learning Objectives The Sales and Operations Planning Process Strategies for Adjusting Capacity Strategies for Managing Demand Quantitative Techniques for Aggregate Planning Hierarchical Nature of Planning Aggregate Planning for Services 14-2 § Sales and Operations Planning Determines resource capacity to meet demand over an intermediate time horizon Aggregate refers to sales and operations planning for product lines or families Sales and Operations planning (S&OP) matches supply and demand Objectives Establish a company wide plan for allocating resources Develop an economic strategy for meeting demand 14-3 § Sales and Operations Planning Process 14-4 § Monthly S&OP Planning Process 14-5 § Disaggregation Breaking an aggregate plan into more detailed plans Create Master Production Schedule for Material Requirements Planning 14-6 § Collaborative Planning Sharing information and synchronizing production across supply chain Part of CPFR (collaborative planning, forecasting, and replenishment) involves selecting products to be jointly managed, creating a single forecast of customer demand, and synchronizing production across supply chain 14-7 § Available-to-Promise (ATP) Quantity of items that can be promised to customer Difference between planned production and customer orders already received Capable-to-promise quantity of items that can be produced and mad available at a later date 14-8 § ATP 14-9 § ATP 14-10 § The LP Solution 14-30 § Level Production for Quantum 14-31 § Chase Demand for Quantum 14-32 § LP Solution for Quantum 14-33 § Transportation Method 14-34 § Transportation Tableau 14-35 § Transportation Tableau 14-36 § Burruss’ Production Plan 14-37 § Excel and Transportation Method 14-38 § Other Quantitative Techniques Linear decision rule (LDR) Search decision rule (SDR) Management coefficients model 14-39 § Aggregate Planning for Services Most services cannot be inventoried Demand for services is difficult to predict Capacity is also difficult to predict Service capacity must be provided at the appropriate place and time Labor is usually the most constraining resource for services 14-40 § Yield Management 14-41 § Yield Management 14-42 § Yield Management 14-43 § COPYRIGHT Copyright © 2014 John Wiley & Sons Canada, Ltd All rights reserved Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd The purchaser may make back-up copies for his or her own use only and not for distribution or resale The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein ... 1 4-8 § ATP 1 4-9 § ATP 1 4-1 0 § ATP 1 4-1 1 § Rule Based ATP 1 4-1 2 § Meeting Demand Strategies Adjusting capacity Resources to meet demand are acquired and maintained over the time horizon of the. .. 50,000 140 ,000 Cost of Level Production Strategy (400,000 X $2.00) + (140 ,00 X $.50) = $870,000 1 4-2 1 § Chase Demand Strategy 1 4-2 2 § Level Production with Excel 1 4-2 3 § Chase Demand with Excel 1 4-2 4... distortion along the supply chain 1 4-1 8 § Quantitative Techniques For AP Pure Strategies Mixed Strategies Linear Programming Transportation Method Other Quantitative Techniques 1 4-1 9 § Pure