AGGREGATE PLANNING WITHIN OM: HOW IT ALL FITS TOGETHER
Aggregate planning determines the resources available to operations to support the overall business plan. It is critical that accurate demand forecasts be available (Chapter 8) so that a reasonable production plan can be developed. A company needs to determine the aggregate production rate output required to determine the appropriate size of the workforce. After these determinations have been made, the company can calculate its inventory levels, back-order levels, capacity requirements, and customer service levels. If the plan requires seven-day-a-week operations, appropriate staff schedules need to be developed (Chapter 15).
The aggregate plan specifies the number of employees needed. This allows the company to determine how much equipment and workspace are needed, as well as to provide the input needed for developing a workplace layout (Chapter 9) within the operations area. Aggregate planning provides the resources needed by operations to achieve the company's strategic objective.
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