BU385 Chapter Notes - Chapter 13: Safety Stock, Finished Good, Material Requirements Planning
Document Summary
Organizations usually make capacity and production decisions on three levels: long term. Define boundaries within which short-term capacity and productions decisions must be made: short term. Process of integrating sales forecasts with operations plans. Usually performed once a year with monthly updates. Process must reconcile all supply, demand, and new-product plans at the aggregate level and tie them to the strategic plan. The activity whereby sales and operations staff undertake monthly planning for the production of all products of the same family (produced in the same facility) for the next 12 months. Goal is to achieve a production plan that realistically assesses an organizations capacity to meet projected demand and that will satisfy total forecast demand at minimum cost. Useful for organizations that experience seasonal fluctuations in demand. Planners must make decisions on employment levels and changes, production levels and changes, and the resulting inventory levels. Decision options for sales and operations planning include demand-influencing actions and capacity-influencing actions.
