BU395 Chapter Notes - Chapter 13: Aggregate Demand, Carrying Cost, Layoff
Document Summary
Sales & operations planning (s&op) is the process of integrating sales forecasts with operations plans. This involves monthly meetings of sales/marketing managers to update forecasts for the next 12 months or so, passing these to production managers who will try to satisfy them, and the reconciliation of any differences, and approval by the executives. Aggregate operations planning is monthly planning for all the products in the same family (produced in the same facility) for the next 12 months or so. The goal of aggregate operations planning is to achieve a production plan that will effectively utilize the organization"s resources to satisfy expected demand. Aggregate operations planning is needed in order to coordinate the activities of the operations function with sales/marketing functions. Without it, the company will be slow to act to changes in demand or production. It is especially useful when the aggregate demand displays significant seasonality.
