In the coming two sessions we will discuss the Production Planning System and the structure of the information system needed for planning. Our discussion will start with an overview of the planning process and will the various options available for the manager as time goes by. We will be using the Wilkins set of cases as basis for class discussion.
Wilkins, Azurn Company: Aggregate Planning
What is the goal of aggregate production planning (APP)?
How might APP benefit Wilkins? What are the risks of using APP at Wilkins?
What constraints are most critical in the development of the aggregate production plan at Wilkins? Why?
Calculate a suggested safety stock inventory level for pressure vacuum breakers (PVBs) for each quarter using the formula:
Safety Stock Inventory = z L t σ
σ Q1 = 1,877, σ Q2 = 3,361, σ Q3 = 3,851, σ Q4 = 8,154
Assuming that overtime is not an option, create up to three aggregate production plans for the PVB product family:
One utilizing a chase strategy,
One utilizing a level strategy, and
One utilizing a mixed optimal strategy, if the chase and level strategies are not optimal.
Interpret your results. What are the benefits and limitations of each plan?
As Connors, would you choose to implement an aggregate production plan? If so, which strategy would you suggest and why? If you would choose not to implement an aggregate production plan, are there any additional changes that could be made to reduce inventory and improve inventory control at Wilkins?