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Aggregate Sales & Operations Planning
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AGGREGATE PLANNING TECHNIQUES
(cut-and-try)
Prodn Plan 1 - Exact Production / Vary workforce
Prodn Plan 2 – Constant workforce / Vary Inventory & permit stockouts
Prodn Plan 4 – Vary workforce / Subcont.
Yield management In service Operations
1.Partitioning demand
2.Price incentives & promotion of off
3.Develop complementary services
YIELD MANAGEMENT
1. Overbooking – accepting more
requests than capacity
2. Assigning capacity amounts to different
market segments
Social
The Professional Life of
3. Differential pricing in different market segments
4. Yield management , is misnomer , actually concerned with managing revenue
Prodn Plan 3 – Constant workforce / Subcontract
Purpose of yield management technique is to sell right capacity to right customer at right price Airlines charging differential fare for the same seat – higher price from price – insensitive business customers and lower prices to price – sensitive vacationers
Aggregate Sales & Operations Planning
Production Planning
Strategies
Sales and
Operations Planning Activities
Aggregate Operations
Plan
- Chase Strategy
- Stable workforce
- Level Strategy
- Pure Strategy – only one
of the variables used to
absorb demand
fluctuations
- Mixed Strategy – two or
more variables used in
combination constitute
this strategy
Long-range planning
TOPICS
- Sales and Operations Planning
- The Aggregate Operations Plan
- Aggregate Planning Techniques
- Yield Management
Greater than one year planning
horizon
Usually performed in annual
increments
Aggregate Sales and Operations Planning
Product group or broad category
Medium-range planning
Main purpose: Specify the optimal combination of
- production rate
- workforce level
- inventory on hand
Six to eighteen months
Usually with weekly,
monthly or quarterly
increments
a process that provides management the ability to strategically direct it’s business to achieve competitive advantage, it brings together all the plans from the business (sales, marketing, development, manufacturing, procurement and financial) into one integrated set of plans.
Short-range planning
This planning is done over an intermediate-range planning period of 3 to18 months
Yield management - it deals with
1. Ability to segment markets
2. Perishable inventory
3. Advance sales
4. Fluctuating demand
5. Accurate , detailed information systems
One day to less than six
months
Usually with weekly or
daily increments
yield management techniques are
1. Transportation
a. Hotel
b. Medicine
c. Storage facilities
d. Broadcasting ( selling commercial time)