The Aggregate Planning also known as Aggregate Production Planning or Aggregate Programming is a method to determine the amount of production and its development in the medium term time.
Aggregate Planning is the process of translating annual business and marketing plans into a production plan, usually in the medium term. Although the business plan is usually expressed in monetary units (profits, income and costs), the aggregate production plan is defined by production units or by an aggregate output unit (or input), such as manufactured product units., or hours of work, etc. An aggregate measure is particularly useful if your production plan includes several different products. The relevant costs for aggregate planning include unavoidable costs, capacity change (subcontracting, expansion or reduction of facilities and / or equipment) and opportunity costs for lost sales. (Tailor, p.192)
The following video, by Professor Ignacio Mira Solves, clearly and succinctly explains the concept of aggregate production planning:
Bibliography
- Heizer, Jay H. and Render, Barry. Production management: tactical decisions, Prentice Hall, 2006 López García, Juan J. Planning and control of production, University of Alicante, 2010. Render, Barry. Principles of operations management, Pearson Education, 2004.Sastre Castillo, Miguel Angel. Dictionary of Business Management and Marketing, ECOBOOK, 2009.
