The Role of Aggregate Planning: The Case of Sealwrap Essay

Aggregate planning is basically a process of analyzing and establishing an initial estimated schedule of the total operations of an organization or firm, in this case, Sealwrap . The plan usually includes target sales forecasts, production levels, inventory levels, and customer backlogs. The role of the schedule is to meet the demand and minimize cost (Gale, 2006). The main objective of aggregate planning is to stabilize and balance capacity and demand while still minimizing cost.

Other objectives include maximization of customer service and utilization of equipment and facilities and minimization of inventory investments, changes in workforce levels and changes in rates of production (“Aggregate Planning”, 2006). There are a lot of strategies that has to be considered in aggregate planning. An example is the Level Production strategy which deals with production at a constant rate and using inventory to absorb demand instabilities(Taylor, 2006). In short, the firm’s capacities are held constant over the planning horizon (“Aggregate Planning”, 2006).

Examples of this are labor levels, output, and production schedules. Another strategy is the Chase strategy which deals with the hiring and firing of personnel to meet the demand. Unlike the level production strategy, capacities of the firm are adjusted to meet the demand

requirements. Linear programming can also be used as a strategy in aggregate planning by minimizing costs in using constraints on requirements and production capabilities. Lastly, mixed strategy can also be used in aggregate planning.

It is the combination of chase and level production strategies (“Aggregate Planning”, 2006). References: Aggregate Planning. (2006). Retrieved December 12, 2006, from http://www. uoguelph. ca/~dsparlin/aggregat. htm Gale, T. (2006). Aggregate Planning. Retrieved December 12, 2006, from http://business. enotes. com/management-encyclopedia/aggregate-planning Taylor, R. R. B. W. (2006). Aggregate Planning. 5th. Retrieved December 12, 2006, from http://homepages. stmartin. edu/fac_staff/dstout/Ba320/ppts_5th_edition/ch13. ppt#313,13,Chase Demand Strategy