Mainly, this is done in an effort to save money, streamline operations and increase productivity. To accomplish this, businesses use an aggregate planning model to develop a game plan that will assist them with determining their staffing requirements, materials needed, estimated timelines and budget costs so they can better plan ahead. Minimize Staffing Fluctuations By using aggregate planning to forecast production demand, businesses are better able to predict their staffing requirements.
All data is supplied in S1 and S2 Tables. The optimization model and the implementation of the epsilon-constraint algorithm used in this the study is supplied in GAMS format as S1 Model.
Abstract Supply chain management that considers the flow of raw materials, products and information has become a focal issue in modern manufacturing and service systems. Supply chain management requires effective use of assets and information that has far reaching implications beyond satisfaction of customer demand, flow of goods, services or capital.
Aggregate planning, a fundamental decision model in supply chain management, refers to the determination of production, inventory, capacity and labor usage levels in the medium term.
Traditionally standard mathematical programming formulation is used to devise the aggregate plan so as to minimize the total cost of operations. However, this formulation is purely an economic model that does not include sustainability considerations. In this study, we revise the standard aggregate planning formulation to account for additional environmental and social criteria to incorporate triple bottom line consideration of sustainability.
We show how these additional criteria can be appended to traditional cost accounting in order to address sustainability in aggregate planning.
We analyze the revised models and interpret the results on a case study from real life that would be insightful for decision makers. Introduction Supply chain management has become one of the most important core functions of companies in manufacturing and service sectors.
Supply chain management considers all of the stages from raw material procurement to consumption by the end users in fulfilling the demand for a certain product or service. In the simplest terms, whenever there is a demand either for a product or a service and supply to fulfill this demand, a supply chain emerges.
Material and information flow both up and down the supply chain. Therefore, any activity in fulfilling the demand is in the scope of the supply chain system under consideration.
Any business entity either being a manufacturing or a service business has an underlying supply chain system and in the core of this system is what is called the production or operations function of the business. Production and operations functions focus on the flow of information, and material between stages of the supply chain.
Complexity of supply chains shows significant varieties depending on its structure, products and services provided by companies.
For example, Apple Corp. Then, in the Pre-Launch stage involves mainly building up inventories for the products in accordance with the expected demand. The launch stage involves forecasting the demand for the next two quarters and resolving backlog problems.
The quarterly reviews focuses on managing inventory levels, adjusting demand forecast and monitoring sales, demand and product life cycle. The last three stages that include Pre-Launch, Launch and quarterly review is considered as part of the Aggregate Planning activity.
The supply chain management problems deal with long-term, medium-term and short-term decision. The medium-term decisions affect the system performance between 3—9 months and generally include the capacity utilization, workforce management and inventory management decisions.
In general, these decisions are considered simultaneously in aggregate planning problem [ 2 ]. The aggregate planning problem sets production capacities, labor utilization, inventory profiles, backordering in the case of not being able to satisfy the demand on time, and subcontracting.
Therefore, the aggregate planning problem is a key instrument in applying the strategic level decisions while determining the principles of operational level problems. In addition, the aggregate planning problem encompasses economic, environmental and social factors. In managing the supply chains, integrating sustainability in the decision-making process had become one of the focal subjects due to increasing awareness from the customers who use the products supplied by companies.
In this paper, we propose a methodological approach to incorporate sustainability considerations in the aggregate planning problem of supply chain management and illustrate our approach on household refrigerator industry in Turkey.
Sustainability Sustainability is used either as the ability to sustain a practice or process or to refer to environmental consciousness in the literature and most non-academic resources. Both comprehensions are valid but incomplete.
The traditional method for posing the aggregate planning problem is based on a purely economic model.
To address the sustainability in supply chain management, the decision maker should incorporate these three pillars of sustainability simultaneously into the decision-making process.
The application of the triple bottom line accounting on economic order quantity EOQ was shown to provide very useful insights [ 5 ]. It was shown that inclusion of environmental and social factors in addition to economic considerations allows the decision makers to assess their decisions from sustainability perspective.
In this paper, a methodological approach to incorporate sustainability considerations in the aggregate planning problem is presented. The standard model is extended to according to additional environmental and social criteria.
The revised models are then analyzed to drive insights into the aggregate planning problem from sustainability perspective. The analysis shows how environmental and social criteria can be appended to traditional cost accounting in order to address sustainability in supply chain management with the aggregate planning problem.
The literature on sustainability of supply chains focus on reviews and also a number ideas to incorporate sustainability. However, most of the existing literature considers only economic and environmental aspects of sustainability.The management team was discussing aggregate planning for the next quarater after shortages of raw materials, down time of machinery, and low worker output produced disappointing sales.
Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization. The aggregate plan generally contains targeted sales forecasts, production levels, inventory levels, and customer backlogs.
This schedule is. Contact TPS for bulk material handling and mineral processing solutions that provide the highest value — safely, on time and on budget — guaranteed! Jan 25, · The Aggregate Planning Problem.
The standard aggregate planning problem aims to determine the production levels, inventory kept in the supply chain, hiring and firing employees, overtime production, backorders and demand satisfaction levels with the .
Aggregate planning is an important method in supply chain management to increase competition and customer services in the market.
Supply chain management information systems are the information systems between companies that employ information and communication technology to arrange information inside and among the participator of . What is Aggregate Planning. Aggregate planning is a type of capacity planning that looks at a specific time horizon, typically between two months and 10 years.