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Aggregate Production Planning: Optimally Matching Capacity to Demand for Output

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Green manufacturing systems are lean. "Lean manufacturing" describes the process of getting rid of waste that results in overproduction, delays, inventory, over-processing and error, and leads to a more continuous production flow based almost entirely on customer pull (an accurate forecast of future demand). A key component of a lean manufacturing system is an aggregate planning system. This module provides a hands-on, user oriented explanation of how to develop an aggregate planning system that will minimize your total costs of meeting forecasted demand by determining how much and when to produce (regular and overtime), when to build and draw down inventories, and when and how much to procure from external vendors. The presentation shows the development of the optimization model AS WELL as the generic input data set up in spreadsheet form and the interpretation and analysis of the generic optimization output. The appendix of the module shows step by step how someone with limited optimization and computer spreadsheet knowledge can obtain the optimal aggregate plan using ExcelÂ’s Solver add-in and using Microsoft Excel, develop a working aggregate planning system.

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