Chapter 16 Sl Sales and doperations Planning

Transcription

1 Chapter 16 Sl Sales and doperations Planning Aggregate Planning Pure and Mixed Strategies Yield Management for Services Operations Planning Activities Long range Intermediate range Manufacturing Short range Master Production Scheduling Material Requirements Planning Order Scheduling Process Planning Strategic Capacity Planning Aggregate Plan/Sales Plan Logistics Vehicle Capacity Planning Vehicle Dispatching Warehouse Receipt Planning Ex 16.1 Forecasting Demand Management Services Weekly Workforce & Customer Scheduling Daily Workforce & Customer Scheduling 2 1

2 Aggregate Planning (Master Planning) A plan for sales and production for the next 3 to 18 months. Aggregation on the supply side by product families. The goal is to minimize total cost. Ex 16.2 Competitors behavior External capacity Raw material availability Master Planning Market demand Economic conditions External Variables Current physical capacity Current workforce Inventory levels Activities required for production Internal Condition 3 Balance Demand and Supply Effectiveness Demand Forecasts Jan Feb Mar Apr May Jun Aggregate (Supply) Plan Jan Feb Mar Apr May Jun 4 2

3 Relevant Cost of Aggregate Plans Efficiency Basic production costs fixed cost: facilities, management, equipment variable cost: materials, utilities, direct labor, overtime cost Costs associated with changes in the workforce level Hiring, training, laying off, part-time employee Inventory holding costs Opportunity cost, storage, insurance, obsolescence Backordering and lost sales costs Cost of expediting, loss of customer goodwill, loss of revenues 5 Aggregate Planning Process 1. Obtain forecast of certain product group F 1, F 2,., F T 2. Compute supply requirement based on forecasts and inventory plan 3. Adjust capacity to meet supply requirement Supply = Inventory + Output Rate Workforce Level + Overtime Output Inventory on hand I t : build up inventory or backorders Output rate P t : monthly output by each worker Workforce level W t : hiring or layoff Overtime or Subcontracting O t I t + P t W t +O t F t I t+1 inventory for next period 4. Compute total cost 6 3

4 Supply Requirement = Demand + Safety Stock Beginning Inventory Jan Feb March April Inventory Forecast Sft Safety Stock Supply requirement Decisions Jan Feb March April Supply requirement Regular output Overtime output Excess inventory Straight time cost Overtime cost Inventory cost Shortage cost 7 Aggregate Planning Strategies: A Cut and Try Example January February March April May June Totals Forecast Safety Stock Beginning Inventory Production Requirement 1,850 1,425 1, , ,725 Work Days Planned Production 1,400 1,850 1,200 1,425 1,000 1,400 1, ,150 1,400 1,725 1,300 Cumulative Difference its Demand its -I Demand Uni Production Uni Production +I Chase Time Level Time 8 4

5 Chase Strategy Hire ($200) or lay off ($250) workers to match demand. Current number of employee=53, each work day had 8 hours, hourly pay=$4. Each unit requires 5 man hours. January February March April May June Total Production Requirement 1,850 1,425 1, ,150 1,725 Production Hours Required 9,250 7,125 5,000 4,250 5,750 8,625 Working Days per Month Hours per Month per Worker Workers Required New Workers Hired Hiring Cost , ,200 $5,800 Workers Laid Off Layoff Cost 0 1,500 4,250 1, $7,000 Straight Time Cost 37,000 28,500 20,000 17,000 23,000 34,500 $160,00 Total cost=172,800 9 Level Strategy Maintain a medium capacity, use inventory or backorders to handle demand. Number of employee=40, Unit holding cost=$1.5, unit shortage cost=$5 January February March April May June Total Beginning Inventory Working Days per Month Production Hours Available Actual Production Demand Forecast Ending Inventory Shortage Cost 0 1, $1,540 Safety Stock Units Excess Inventory Cost $948 Straight Time Cost 28,160 24,320 26,880 26,880 28,160 25,600 $160,000 Total cost=162,

6 Stable workforce variable work hours (overtime) Maintain a low capacity, use overtime to increase production. Number of employee=38, overtime pay=$6 per hour January February March April May June Total Beginning Inventory Working Days per Month Production Hours Available 6,688 5,776 6,384 6,384 6,688 6,080 Regular Shift Production 1,338 1,155 1,277 1,277 1,338 1,216 Demand Forecast 1,800 1,500 1, ,100 1, Units Available before Overtime Units Overtime Overtime Cost 1,860 10, $12,210 Safety Stock Units Excessive Inventory Cost $1,281 Straight Time Cost 26,752 23,104 25,536 25,536 26,752 24,320 $152,00 Total cost=165, Level Strategy Chase Strategy Overtime Marketing Mixed Strategy Inventory Sub- contract Optimization: Mathematical Programming Advanced Planning from SAP and i2 12 6

7 Balancing Production using Complementary Products 期別 Lawn mower Snow blower ,000 16, ,000 4, , ,000 5, ,000 35, ,000 45,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 mower blower Case: Production Planning at Sport Obermeyer Forecasts based on Panel Consensus Independent forecasts can provide an indicator of the forecast accuracy for each style. Obermeyer invites it key customers to place early orders (20% of total sales) to get market information. Forecasts are updated based on those early orders. 14 7

8 Production Planning at Sport Obermeyer Panel Early bird Revised 1st 2nd forecasts orders forecasts shipment shipment Phase 1 min. orders Phase 2 revised orders Summer extra orders and expensive styles Selling season 15 Matching Supply and Demand for Services DEMAND Strategies SUPPLY Strategies Developing complementary services Developing reservation systems Partitioning demand Establishing price incentives Promoting off-peak demand Sharing capacity Crosstraining employees Using part-time employees Increasing customer participation Scheduling work shifts Creating adjustable capacity Yield Management 16 8

9 Demand Management Ex: airlines reduce ticket prices during off-season and offer discount for early reservation. Revenue Management American Airlines: SABRE If supply is fixed and perishable, we should offer low prices so that there is enough demand to consume the supply. But we also limit the amount of supply sold at low prices in order to satisfy customers willing to pay high prices. Pricing structure must be reasonable. (rate fences) Ability to control or forecast demand Customers may turn to competitors. 17 Aggregate Planning Applied to Public Services Cannot inventory or backorder services Working overtime does not help either City government cannot layout workers at will. Ex 14.8 Ex

10 Ex Solution: maintain a medium level of staff and use part-time help 19 Conclusion Balancing supply and demand is essential to running a business well. Teamwork between sales, operations, finance and product development. Improve customer service, lower inventory, reduce order lead times, stabilize production rates Back orders, late shipments, dissatisfied customers, high inventories, finger-pointing, cash-flow problems