Objectives of the Aggregate planning

1. To minimize the investments in the various inventories.
2. To minimize the total cost over the planning horizon.
3. To maximize the customer service.
4. To minimize the changes in the workforce levels.
5. To minimize the changes in the production rates.
6. To maximize the utilization of the plant and the various equipments.

Introduction and meaning
Aggregate planning can be defined as the process involving the development, analyzation and the maintenance of a preliminary and approximate schedule of the overall operations that take place or have to take place in an organization. It is actually an operational activity involving an aggregate plan, which would guide the production process. This plan is made in advance of about 3 to 18 months and this plan plays a very critical role in providing an idea to the management about the quantity of the materials and the other resources that are to be procured and at what time of the operation all these are required.

An aggregate plan also consists of the targeted sales forecasts, production levels, inventory levels, customer backlogs etc. In this type of planning, the word ‘aggregate’ is used because the planning at this level includes all the resources in the aggregate. The schedule used in the aggregate planning plays a very critical and an essential role in providing the satisfaction to the demand forecast at a minimum cost.

Aggregate planning serves as the basic structure for the future short – range type planning and this type of planning can be categorized as follows –

1. Production plan –
• Also called as the manufacturing aggregate plan.
• Is a managerial statement of the period – by – period production rates, work – force levels etc.

2. Staffing plan –
• Also called as the service aggregate plan.
• Is a managerial statement of the period – by – period staff sizes and the labor – related capacities, given customer requirements and the capacity limitations.

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