Inventory management and aggregate planning serve an obvious need in production companies, but these concepts are also highly valuable for service businesses. Identify an existing service based business and describe the importance of inventory management or aggregate planning as it applies to that company.
– 200-300 words
– at least two references
This weeks study ————————————————-
Aggregate Planning and Master Scheduling
We will continue this week by looking at aggregate planning, which establishes general levels of employment, output, and inventories for periods of 2 to 12 months. In the spectrum of planning, it falls between the broad decisions of long-range planning and the very specific and detailed short-range planning decisions. It begins with an overall forecast for the planning horizon and ends with preparations for applying the plans to specific products and services.
The essence of aggregate planning is the aggregation of products or services into one “product” or “service.” This permits planners to consider overall levels of employment and inventories without having to become involved with specific details that are better left to short-range planning. Planners often use informal graphic and charting techniques to develop plans, although various mathematical techniques have been suggested.
Inventory management is a core operations management activity. Good inventory management is often the mark of a well-run organization. Inventory levels must be planned carefully in order to balance the cost of holding inventory and the cost of providing reasonable levels of customer service. Successful inventory management requires a system to keep track of inventory transactions, accurate information about demand and lead times, realistic estimates of certain inventory-related costs, and a priority system for classifying the items in inventory and allocating control effort.
By the end of this week, students will be able to:
- Demonstrate and discuss how inventory, level employment, chase demand, and aggregate labor planning applies to a service business.
- Define, recall, and identify terms and concepts associated with quality management, costs, quality management tools, quality teams, control charts, inventory systems, quality models, cycles, supply chain, aggregate planning, and manufacturing capacity.
- Examine and interpret key elements of scheduling and inventory management.
Operations ManagementMcGraw-Hill Education; 13thedition (February 15, 2017) by William J Stevensone-copyTextbook with Connect access code: ISBN13: 978-1259948206
Stevenson, Chapters 11 &13