Productionplanningcontrolppc 150928163012 Lva1 App6892 PDF

Production Planning & Control
Simple Sustainable Solutions
PRODUCTION PLANNING &

CONTROL
Trainers:
HakeemUrRehman
&
Sajid Mahmood
Simple Sustainable Solutions 1
Outline:
DAY1:
o What is Production Planning & Control (PPC)?
o Forecasting Methods & Its Applications
o Understanding Data Patterns & Its Methods
DAY2:
o Aggregate Production Planning (APP)
o Inventory Management
DAY3:
o Master Production Scheduling (MPS)
o Material Requirement Planning (MRP)
Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 2

What is Production Planning & Control (PPC)?
The highest efficiency in production is obtained by

manufacturing the required quantity of the product, of the
required quality, at the required time, with the best and
cheapest method.
PRODUCTION BRAIN Production Planning

SYSTEM & Control (PPC)
Four Factors involve:
o Quantity
o Quality
o Time
o Price
PPC regulates and controls how, where, and When work is to be

done.

Why Forecasting?
The Effect of Inaccurate Forecasting on the Supply Chain

Forecasting:
A prediction of future events used

for planning purpose
Principles of Forecasting:
1. Forecasts Are Almost Always
Wrong (But They Are Still Useful)
2. Forecasts are more accurate for

shorter than longer time horizons
3. Forecasts are more accurate for

groups or families of items rather Objective: Better future Forecast
than for individual items. by Minimizing the error (Actual
Vs Forecasted Demand)

Types of Forecasting Methods:

FORECASTING METHODS
Little or no quantitative Quantitative historical data available

data available Evidence of a relationship between the variable of
interest and some other variable(s)
Qualitative Techniques
Quantitative Techniques
o Market surveys
o Delphi method Time Series Models: Future Causal Models: Future is a
o etc. is a function of time function of any other factors
o Moving Average other than time
o Weighted Moving Average o Linear Regression
o Exponential Smoothing o Multiple Regression
o Linear Regression
o etc.
Forecasting Methods Demand Patterns Over Time:

Any time series (i.e. data over time) is composed of the following:
DATA = Level + Trend + Seasonality + Cycles + Random Variation
DATA = PATTERN + Random Variation
(a) Level or Horizontal Pattern: Data (b) Trend Pattern: Data are progressively
follow a horizontal pattern around the mean increasing (shown) or decreasing
Quantity
Quantity
Time
Time
(c) Seasonal Pattern: Data exhibit a regularly (d) Cycle: Data increase or decrease over time
repeating pattern (Data patterns created by economic fluctuations)
Quantity
Quantity
Time (Quarters) Time (Quarters)

TimeSeries Forecasting Methods: Level or Horizontal Pattern

(a) Level or Horizontal Pattern: Data follow Averaging Techniques: work best when a
a horizontal pattern around the mean series tends to vary about an average (i.e.
smooth variations around mean)
They can handle step changes or gradual
Quantity
changes in the level of a series Techniques:

o Simple Moving average
o Weighted moving average
Time o Exponential smoothing
Case Study1: Week
Week Demand
Demand Week
Week Demand
Demand Week
Week Demand
Demand Week
Week Demand
Demand
11 415
415 14
14 365
365 27
27 351
351 40
40 282
282
(Open Excel 22 236 15 471 28 388 41 399
236 15 471 28 388 41 399
Sheet for the case 33 348 16 402 29 336 42 309
348 16 402 29 336 42 309
study data) 44 272
272 17
17 429
429 30
30 414
414 43
43 435
435
Case Study-1.xls 55 280
280 18
18 376
376 31
31 346
346 44
44 299
299
66 395
395 19
19 363
363 32
32 252
252 45
45 522
522
77 438
438 20
20 513
513 33
33 256
256 46
46 376
376
88 431
431 21
21 197
197 34
34 378
378 47
47 483
483
99 446
446 22
22 438
438 35
35 391
391 48
48 416
416
10
10 354
354 23
23 557
557 36
36 217
217 49
49 245
245
11
11 529
529 24
24 625
625 37
37 427
427 50
50 393
393
12
12 241
241 25
25 266
266 38
38 293
293 51
51 482
482
13
13 262
262 26
26 551
551 39
39 288
288 52
52 484
484

Case Study1: Is Seasonality or Cyclical effects Present? Neither seasonality
Demand Pattern Over Time nor cyclical effects
800 can be observed
600
Demand
400
200 Demand
0
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
Time (Weeks)
Is Trend Present? Run Linear Regression to test in the model = 0 + 1 t +
C oeff. S tand. E rr t-S tat P -value Lower 95%U pper 95%

Intercept 369.27 27.79436 13.2857 5E-18 313.44 425.094
W eeks 0.3339 0.912641 0.36586 0.71601
0.71601 -1.49919 2.16699
Conclusion: A stationary model is

appropriate (i.e. Averaging techniques). PValue > 0.05; No Linear trend in
the data

AVERAGING TECHNIQUES:
Simple Moving Average: Technique that averages a number n
of the most recent actual values in generating a forecast. A t i

Ft MA t i 1
Weighted Moving Average: The most

recent values in a time series are given Ft wn At n wn 1 At ( n 1) ... w1 At 1
more weight in computing a forecast.
Simple Exponential Smoothing: The smoothed value Lt is the weighted average of

o The current periods actual value (with weight of ).
o The forecast value for the current period (with weight of 1).
The smoothed value Lt becomes the forecast for period t+1.
An initial forecast is needed to start the

Ft+1 = = t + (1 )
process
Performance of Forecasting Methods: Error Performance Measures:

Which one of these forecasting methods gives the best forecast?
( )2
=

= 100

MAPE > 30% Forecast is more or less inaccurate

MAPE < 30% Forecast is reasonably good
MAPE < 20% Forecast is good
MAPE < 10% Forecast is Very good
Smaller the Error Performance Measure (i.e MAD, MSE, MAPE) better the method.

Performance of Forecasting Methods: Selecting Model Parameters

Use the performance measures to select a good set of values for each model
parameter.
For the Simple Moving Average:
o the number of periods (n).
For the Weighted Moving Average:

o The number of periods (n),
o The weights (Wi).
For the Simple Exponential Smoothing:

o The exponential smoothing factor ().
Excel Solver can be used to determine the values of the model parameters.
Relationship between exponential smoothing and simple moving average:

2 An exponential smoothing forecast based on large number
k of periods should have a small


TimeSeries Forecasting Methods: Linear Trend Pattern

(b) Trend Pattern: Data are progressively Techniques for Trend:
increasing (shown) or decreasing Linear Regression equation
Holts Linear Exponential Smoothing
Quantity
(Trend-Adjusted Exponential Smoothing)

Non-linear trends
o SCurve trend
o Exponential trend equation
Time o etc.
Case Study2:
(Open Excel
Sheet for the
case study data)
Case Study-2.xls

TimeSeries Forecasting Methods: Linear Trend Pattern

TECHNIQUES FOR LINEAR TREND:
Linear Regression: Construct the regression equation
based on the historical data available. = 0 + 1 +
The independent variable is time.
The dependent variable is the time-series value.
Holts Linear Exponential Smoothing: The trend adjusted forecast consists of two
components.
Smoothed factor (i.e. Level)
Trend factor
Level:
Ft +1 Lt Tt
Trend:
Adjust the Level Lt , and
Initial Values: the Trend Tt in each period

TimeSeries Forecasting Methods: Seasonality Pattern

(c) Seasonal Pattern: Data exhibit a regularly repeating pattern
Seasonality: Seasonality is expressed in terms of
the amount that actual values deviate from the
Quantity
average value of a series.
Many time series exhibit seasonal and cyclical

variation along with trend
Time (Quarters)
MODELS OF SEASONALITY o Multiplicative: Seasonality is expressed
o Additive: Quantity (i.e. added or subtracted) as a percentage of the average (or trend)
from the time-series average in order to amount which is then used to multiply the
incorporate seasonality value of a series in order to incorporate
= + + + seasonality.
= ( )( )( )( )
THE CLASSICAL DECOMPOSITION TECHNIQUE: To develop an additive or multiplicative model;

TheSimple
time Sustainable
series is Solutions
first decomposed to Hakeem-Ur-Rehman
its components&(trend, seasonality, cyclical variation).
Sajid Mahmood 15
TimeSeries Forecasting Methods: Seasonality Pattern

Case Study3:
(Open Excel Sheet for the case study data) Case Study-3.xls
The graph exhibits long term trend

The graph exhibits seasonality pattern

Day1: Review
Why Forecasting?
What is Forecasting?
Time Series Data Patterns
Forecasting Methods
o Smoothing Techniques (i.e. Averaging Techniques)
o Linear Trend Techniques
o Decomposition Technique
Forecasting Methods Performance Measures
Forecasting Methods Selection of Model Parameters

o Using Excel Solver

Outline:
DAY1:
DAY2:
DAY3:

Overview of Production / Operations Planning Activities:

What is Aggregate Operations Planning?
Suppose the figure to the right represents

forecast demand in units.
Now suppose this lower figure represents

the aggregate capacity of the company to
meet demand.
What we need to do is to balance out the

demand and the capacity supply?
Balancing Aggregate Demand and Aggregate Production Capacity to specify

the optimal combination of:
o production rate; workforce level; inventory on hand
A poor aggregate plan can result in lost sales, lost profits, excess inventory, or
excess capacity
Aggregate Operations Planning: Understanding Process
Aggregate
Planning

Aggregate Operations Planning: Inputs, Outputs & Goal

Product group ((or) family) or broad category (aggregation)
Intermediate-range planning period: 6-18 months
Resources
o Workforce
Policy statements
o Subcontracting Total cost of a plan
o Overtime
Production/operation plan
o Inventory levels
o Back orders o Projected levels of:
Demand forecast
Aggregate Inventory
Planning Output
Costs
Employment
o Inventory carrying
o Back orders Subcontracting
o Hiring/firing Backordering
o Overtime
o Inventory changes
o subcontracting
Goal: Specify the optimal combination (tradeoff) of Production rate, workforce level,
overtime production, subcontracting (i.e. outsourced capacity), inventory / backlog to
maximizes the firms profit over the
Simple Sustainable Solutions
planning horizon
Hakeem-Ur-Rehman & Sajid Mahmood 22
Aggregate Operations Planning: Procedure (Process Steps)

1. Develop the aggregate sales forecast and aggregate planning value.
2. Translate the sales forecast into resource requirements.
3. Generate alternative production plans.
Aggregate Planning value: The term aggregate refers to a line of products (i.e.
Product family), not just one individual product. An aggregate unit is some kind of an
average unit.
Example: A firm produces 6 different models of washing machines
Model Working Hours Total
Number Required Sales (%) The manager decides to define an aggregate
A5532 4.2 32%
unit of production as a machine requiring
some weighted total working hours where the
K4242 4.9 21% weights are taken from the total sales (%).
L9898 5.1 17%
L3800 5.2 14% Aggregate Planning value = (0.32)(4.2) +

(0.21)(4.9) + (0.17)(5.1) + (0.14)(5.2) +
M2624 5.4 10%
(0.10)(5.4) + (0.06)(5.8)
M3880 5.8 6% = 4.856 hours per aggregate unit

Example: ABC Electrical performs

three services: cable TV installations,
satellite TV installations, and digital
subscriber line (DSL) installations.
Estimated labor hours per installation: Estimated supply costs per installation:
0.4* 2 + 0.4 * 3 + 0.2 * 4 = 2.8 hours 0.4 * $15 + 0.4 * $90 + 0.2 * $155 = $73
ABC expects (i.e. forecasted) total installations for the next three months to be 150,
175, and 200, respectively.
Estimated Resource Requirements at ABCs Electrical


CASE STUDY: XYZ Cabinets Manufacturing Company

XYZ is a manufacturer of several different lines of kitchen and bathroom cabinets that
are sold through major home improvement retailers. XYZs marketing vice president
has come up with the following combined sales forecast for the next 12 months:
XYZ Cabinets Manufacturing

Company; Sales Forecast
Case Study: (Open Excel

Sheet for the case study
data) APP-Case Study.xls


Generate alternative production plans: Production Plan Strategies
Pure Production Plan Strategies:
o Level production plan in which production is held constant and inventory
is used to absorb the differences between production and the sales forecast.
o Chase production plan in which production is changed in each time period
to match the sales forecast.

Aggregate Operations Planning: Alternative Production Plan

Level vs. Chase Production Plan
Advantages: Advantages:
o Stable output rates and workforce o Investment in inventory is low
o Labor utilization in high
Disadvantages:
o Greater inventory costs Disadvantages:
o Increased overtime and idle time o The cost of adjusting output rates
o Resource utilizations vary over and/or workforce levels
time
Aggregate Operations Planning: Basic Formulas & Relationships
Labour hrs. Req. per month = (Labour hr. per unit) * (Months forecasted
demand)
# of workers Req. per month = (Labour hrs. Req. per month ) / (Working hrs. per
month per employee)
# of workers in a period = (# of workers at the end of previous period) + (# of

workers at start of the period) (# of laid off workers at start of the period)
Regular Production per month = (Actual # of workers * Working hours per

month per employee)/(Labour hr. per unit)
Inventory at the end of a period = (Inventory at end of the previous period) +

(Production in current period) (Demand in current period)
Cost for a period = Output Cost (Reg.+OT+Sub.) + Hire/Lay off cost + Inventory
cost + Back order cost
Aggregate Operations Planning: Alternative Production Plan
Generate alternative production plans: Production Plan Strategies

Mixed Production Plan Strategy:
o Combination of Level Production and Chase Demand strategies
o Examples of management policies
no more than x% of the workforce can be laid off in one quarter
inventory levels cannot exceed x dollars
Optimization Modeling to Aggregate Production Plan:

o Linear Programming Model Using Excel Solver

Aggregate Operations Planning: Selecting the Production Plan
Summary of Alternative Production Plans for XYZ Cabinets Manufacturing

Company:
LEVEL CHASE LP Model
Regular Prod. Cost $20,160,000.00 $19,712,000.00 $20,160,000.00
Overtime Prod. Cost 0 $474,260.00 0
Hiring/Layoff costs $16,250.00 $39,000.00 $26,625.00
Inventory Cost $114,800.00 $50,240.00 $20,400.00
Total Costs $20,291,050.00 $20,275,500.00 $20,207,025.00
Key Factors Flat Production Minimal Inventory Optimum levels
level Significant but fractional
Inventory level overtime values
grow high production Assumption
required in peak (Start & End
months Inventory is 0)

Inventory Management: What is Inventory?

INVENTORY is the stock of any item or resource used in an organization. These
items or resources can include: raw materials, finished products, component parts,
supplies, and work-in-process
starting point of inventory management is customer
demand; Inventory exists to meet customer demand
Independent Demand
Dependent Demand A
B(4) C(2)
D(2) E(1) D(3) F(2)
Independent demand is uncertain.

Dependent demand is certain.

Inventory Management: Inventory Costs
1. CARRYING COSTS: Cost of holding an item in inventory; Vary with the level
of inventory and the length of time an item is held
Carrying costs include: Rent, Heating, cooling, lighting Security, Record
keeping
2. ORDERING COSTS: Cost of replenishing inventory; Expressed as a dollar

amount per order
Vary with the number of orders made; As the order size increases, ordering
costs decrease and carrying costs increase
Ordering costs include: Purchase orders, Transportation and shipping,
Receiving, Inspection, Handling and storage
3. SHORTAGE COSTS
Temporary or permanent loss of sales when demand cannot be met because of
insufficient inventory
Customer dissatisfaction and loss of goodwill
For internal demand, shortage can cause work stoppage or create delays

Inventory Management: Definition & ABC Inventory Classification

An INVENTORY MANAGEMENT SYSTEM is the set of policies and controls
that monitor levels of inventory and determines:
o what levels should be maintained,
o when stock should be replenished, and
o how large orders should be.
THE ABC CLASSIFICATION SYSTEM: An inventory classification system in
which a small percentage of (A) items account for most of the inventory value.
o In ABC analysis each class of inventory requires different levels of inventory
control
o The higher the value of inventory, the tighter the control
Class A
o 5 15 % of units
o 70 80 % of value
Class B
o 30 % of units
o 15 % of value
Class C
o 50 60 % of units
o 5 10 % of value
Inventory Management: ABC Inventory Classification

Example: The maintenance department for a small manufacturing firm has
responsibility for maintaining an inventory of spare parts for the machinery it
services. The department manager wants to classify the inventory parts according to
the ABC system to determine which stocks of parts should most closely me
monitored. The parts inventory, unit cost, and annual usage are as follows:

Inventory Management: Inventory Control Systems

Continuous Inventory Systems (fixed-order-quantity)
o Constant amount ordered when inventory declines to predetermined level
referred to as reorder point
Periodic Inventory System (fixed-time-period system)

o Order placed for variable amount after fixed passage of time
ECONOMIC ORDER QUANTITY (EOQ) MODELS: To determine how

much to order in a continuous system the economic order quantity (EOQ) model is
used
o BASIC EOQ MODEL: EOQ model is to determine the optimal order quantity
that will minimize total inventory costs
ASSUMPTIONS:
Demand is known with certainty and is constant over time
No shortages are allowed
Lead time for the receipt of orders is constant
Order quantity is received all at once
Inventory Management: EOQ Model

Inventory Management: Safety Stock

SAFETY OR BUFFER STOCK
o Inventory level might be depleted at a slower or faster rate during lead time
o Buffer added to on hand inventory during lead time
Reorder Point = (Average daily demand)*(Lead Time) + safety stock
= +
= + 2 + 2

Day2: Review
What is Aggregate Production Planning?

o Understanding the Process of APP
o Aggregate Production Planning Procedure
o Aggregate Production Planning Strategies
o Level Strategy
o Chase Strategy
o LP Model
Inventory Management
o What is Inventory?
o Inventory Costs
o What is Inventory Management?
o ABC Classification
o Inventory Control Systems
o EOQ Model
o Safety Stock

Outline:
DAY1:
DAY2:
DAY3:

Resource Planning for Manufacturing:

Master Scheduling: Def. & Linking with APP

Master Production Schedule (MPS): Timephased plan Aggregate Plan
specifying how many and when the firm plans to build each (Product Groups)
end item
tracks production output and matches this output to actual MPS
customer (Specific End Items)
In Reality
o Demand and Production numbers in the
master schedule are unlikely to match the
sales and operations plan exactly.
o Actual capacity requirements might not

match the planning values. Breaking by Week & by Product
safety stock, ProductA

schedule overtime, or ProductB
take other measures to make up
difference between the plan and ProductC
reality.

Master Scheduling Process & Its Linkages:

INPUTS OUTPUTS
Beginning Inventory Projected Inventory
Forecasted MASTER
Demand SCHEDULING Master Production
Customer Order Schedule
(Booked Order)
Master production schedule

linkages:

Developing Master Schedule Record:

Master schedule records track several key pieces of information:
o Forecasted Demand (Estimated demand)
o Booked orders (Confirmed demand)
o Projected inventory levels
o Production quantities (Master production schedule)
The amount of product that will be finished and available for sale at the beginning of
each week.
o Units still available to meet customer needs (Available To Promise)
= (1) + ( , )
Available To Promise (ATP):

o ATP for first week of the Master Schedule Record:
= (1) + 1 =
Case Study: (Open Excel
Sheet for the case study
o ATP for any subsequent week in which MPS > 0:
data) MSR.xls
= 1 =

Material Requirement Planning (MRP):

Materials requirements planning (MRP) Computerized inventory control and
production planning system
how do firms actually organize things to turn materials into finished products?
Once the independent demand is known,

Independent Demand
the dependent demand can be determined
Dependent demand drives MRP
Dependent Demand A
B(4) C(2)
When to Use MRP?
Dependent and discrete items
D(2) E(1) D(3) F(2) Complex products
Job shop production
Assemble-to-order environments
Independent demand is uncertain.
Dependent demand is certain.

Material Requirement Planning System: Def., Inputs & Outputs

Based on a master production schedule, a material requirements planning
system:
o Creates schedules identifying the specific parts and materials required to
produce end items
o Determines exact unit numbers needed
o Determines the dates when orders for those materials should be released,
based on lead times
INPUTS OUTPUTS
Master Schedule Planned order releases
Material o Work Orders
Bill of Materials o Purchase Orders
Requirement o Rescheduling notices
Inventory Records Planning (MRP)
MRP process consists of four basic steps:
o Exploding the bill of material
o Netting out the inventory
o Lot sizing
o Time-phasing requirements
Material Requirement Planning System: Inputs

MRP Inputs: 2. Bill of materials (BOM): A list of all of the items
1. Master Production Schedule needed to produce one unit of a product.
2. Bill of Material (BOM) o Product structure tree: Visual representation of
3. Inventory Record file BOM, where all components are listed by levels.
EXAMPLE # 1 (Product Chair): BOM Product Structure Tree
How many Legs we need
in order to produce 50
Chairs?
3. Inventory Record File: A database of information

on every item produced, ordered, or inventoried.
Gross requirements, Amount on hand, Lead times, &
more....
Material Requirement Planning System: Inputs

EXAMPLE # 2 (Product Clip Board): BOM Product Structure Tree
Time-phased BOM: An assembly chart shows the lead time required to manufacture an item.
Assume Lead time for each item =1 week
How long it will take to assemble a

clipboard from scratch?
Forward scheduling: start at todays date
and schedule forward to determine the
earliest date the job can be finished.
Backward scheduling: start at the due date
and schedule backwards to determine when
to begin work.
Material Requirement Planning System: MRP Process & Matrix

Exploding the bill of material
Netting out the inventory
o Netting = (on-hand quantities + scheduled receipts) Gross requirement
Lot sizing: determining the quantities of items produced or purchased
Time-phasing requirements
Lot Sizing in MRP Systems: MRP generates material orders; Order sizes / lots
can be chosen according to various objectives
o Lot-for-lot (L4L): Produce to cover next period
o EOQ: Apply the EOQ approximation for yearly demand
MRP
Matrix:


EXAMPLE: School Mate Products

Following the same logic Gross

Requirements in Periods 4 and 5 develop
Net Requirements, Planned Order Receipts,
and Planned Order Releases

Following the same logic, the Lapdesk

MRP matrix is completed as shown



MRP & JIT / Lean Production:
How does Units are PUSHED forward

MRP work? according to the plan!
What about Units are PULLED forward

JIT / Lean only when needed!
Production?
Units are PUSHED forward to

Push / Pull a certain point.
Decoupling Final configuration (PULL)
Point occurs only when the customer
demand occurs.

Questions & Answers:
ANY QUESTION?
THANKS FOR LISTENING ()

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Production Planning & Control

Simple Sustainable Solutions

PRODUCTION PLANNING &

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 2

What is Production Planning & Control (PPC)?

The highest efficiency in production is obtained by

PRODUCTION BRAIN Production Planning

PPC regulates and controls how, where, and When work is to be

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 3

The Effect of Inaccurate Forecasting on the Supply Chain

A prediction of future events used

2. Forecasts are more accurate for

3. Forecasts are more accurate for

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 5

Types of Forecasting Methods:

Little or no quantitative Quantitative historical data available

Forecasting Methods Demand Patterns Over Time:

Time (Quarters) Time (Quarters)

TimeSeries Forecasting Methods: Level or Horizontal Pattern

changes in the level of a series Techniques:

TimeSeries Forecasting Methods: Level or Horizontal Pattern

C oeff. S tand. E rr t-S tat P -value Lower 95%U pper 95%

Conclusion: A stationary model is

TimeSeries Forecasting Methods: Level or Horizontal Pattern

of the most recent actual values in generating a forecast. A t i

Weighted Moving Average: The most

Simple Exponential Smoothing: The smoothed value Lt is the weighted average of

An initial forecast is needed to start the

Performance of Forecasting Methods: Error Performance Measures:

MAPE > 30% Forecast is more or less inaccurate

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 11

Performance of Forecasting Methods: Selecting Model Parameters

For the Weighted Moving Average:

For the Simple Exponential Smoothing:

Relationship between exponential smoothing and simple moving average:

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 12

TimeSeries Forecasting Methods: Linear Trend Pattern

(Trend-Adjusted Exponential Smoothing)

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 13

TimeSeries Forecasting Methods: Linear Trend Pattern

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 14

TimeSeries Forecasting Methods: Seasonality Pattern

average value of a series.

Many time series exhibit seasonal and cyclical

THE CLASSICAL DECOMPOSITION TECHNIQUE: To develop an additive or multiplicative model;

TimeSeries Forecasting Methods: Seasonality Pattern

The graph exhibits long term trend

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 17

Time Series Data Patterns

Forecasting Methods Performance Measures

Forecasting Methods Selection of Model Parameters

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 17

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 18

Overview of Production / Operations Planning Activities:

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 19

What is Aggregate Operations Planning?

Suppose the figure to the right represents

Now suppose this lower figure represents

What we need to do is to balance out the

Balancing Aggregate Demand and Aggregate Production Capacity to specify

Aggregate Operations Planning: Understanding Process

Simple Sustainable Solutions Hakeem-Ur-Rehman & Sajid Mahmood 21

Aggregate Operations Planning: Inputs, Outputs & Goal