Aggregate planning consists of an intermediate-range plan that allows companies to plan within a range of two to 18 months. Unlike other plans used in operations manufacturing, aggregate planning accommodates seasonal and various fluctuations of demand. The goal of such planning consists primarily of reducing costs while simultaneously meeting customer demand and their general expectations.
. Overall, aggregate planning combines demand forecasts, inventory levels and backlogs pertaining to customer orders. While other planning techniques oftentimes focus on individual products or services, aggregate planning combines similar products and services in order to facilitate planning. Companies with one or two product offerings may not find aggregate planning conducive to its operations since each product would require optimal attention. On the other hand, a company offering a wide array of goods would benefit from aggregate planning. This allows companies to group their product offerings with similar items in order to ease the pressure on the operations department. As mentioned previously, aggregate planning provides a plan for companies seeking intermediate-range goals. Furthermore, companies can break down the aggregate plan into a master production schedule. Businesses refer to this process as disaggregation. The master production schedule takes the plan further by separating the end products into time-phased requirements. Overall, the schedule allows operations to plan activities on a daily basis in order to match supply with demand. Businesses in every industry pursue aggregate planning in order to maintain organization. Instead of focusing resources and time on every single product and service offering, companies can use aggregate planning to organize similar items. Since such planning requires intermediate-range decisions, the plan remains flexible to changes. Lastly, the planning facilitates companies who must consistently deal with seasonal variations and fluctuations of demand. Industries producing goods for weather-related activities find aggregate planning to prove especially useful within their respective companies. More Reference Links: http://www.referenceforbusiness.com/management/A-Bud/Aggregate-Planning.html http://www.uoguelph.ca/~dsparlin/aggregat.htm
