In this chapter you should be able to: Discuss the philosophies of quality gurus, define the term quality as it relates to products and as it relates to services, identify the determinants of quality,. | Chapter 13 - Aggregate Planning Operations Management 6th Edition R. Dan Reid & Nada R. Sanders Copyright © 2016 John Wiley & Sons, Inc. Learning Objectives Explain business planning. Discuss planning options. Identify aggregate planning strategies. Develop aggregate plans. Business Planning Strategic business plan A statement of long-range strategy and revenue, cost, and profit objectives. Sales and operations planning The process that brings together all the functional business plans (marketing, operations, engineering, and finance) into one integrated plan. Marketing plan Identifies the markets to be served, desired levels of customer service, product competitive advantage, profit margins, and the market share needed to achieve the objectives of the strategic business plan. Business Planning Cont’d Financial plan Identifies the sources and uses of funds; projects cash flows, profits, return on investment; and provides budgets in support of the strategic business . | Chapter 13 - Aggregate Planning Operations Management 6th Edition R. Dan Reid & Nada R. Sanders Copyright © 2016 John Wiley & Sons, Inc. Learning Objectives Explain business planning. Discuss planning options. Identify aggregate planning strategies. Develop aggregate plans. Business Planning Strategic business plan A statement of long-range strategy and revenue, cost, and profit objectives. Sales and operations planning The process that brings together all the functional business plans (marketing, operations, engineering, and finance) into one integrated plan. Marketing plan Identifies the markets to be served, desired levels of customer service, product competitive advantage, profit margins, and the market share needed to achieve the objectives of the strategic business plan. Business Planning Cont’d Financial plan Identifies the sources and uses of funds; projects cash flows, profits, return on investment; and provides budgets in support of the strategic business plan. Engineering plan Identifies new products or modifications to existing products that are needed to support the marketing plan. Master production schedule The anticipated production schedule for the company expressed in specific configurations, quantities, and dates. Aggregate Planning Integral to part of the business planning process Supports the strategic plan Aggregate plan is also called Production Plan Identifies resources required for operations for the next 6-18 months Details the aggregate production rate and size of work force required Output used are units, gallons, pounds, standard hours and dollars The Business Planning Hierarchy Aggregate Planning Options Demand-based options Reactive: Finished goods inventory – absorb fluctuations and develop a stable work environment Backorders for fluctuations (unfilled orders); can be costly Proactive: Shifts the demand – patterns (incentives) to minimize fluctuations . early bird dinner prices at a restaurant .
