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PROF.A.K.CHATTERJEE
PRODUCTION PLANNING
Planning implies looking ahead into the future.
Based on how far ahead into the future one is
looking at, we have the following classification
CLASSIFICATION OF PLANNING
Long Range Planning : Planning Horizon 5-10
years.
Medium Range Planning : Planning Horizon 1
year.
Short Range Planning : Planning Horizon less
than 1yr.
PRODUCTION PLANNING
PRODUCTION PLANNING by definition would constitute
planning for production /operations for the upcoming year
(medium and short range). The medium range planning may
be further classified based on the demand.
The medium range planning problem is termed as Aggregate
Production Planning in the literature. In such cases the
demand
Is assumed to be Dynamic and Deterministic in nature.
AGGREGATE PRODUCTION
PLANNING PROBLEM
EXAMPLE 1: Determine the minimum cost
production plan. Reqd. data is given below:
Jan
Feb
Mar
Demand 100
75
125
RT Cap 100
100
100
OT Cap 25
25
25
Relevant cost: RT cost/unit Rs.100
OT cost/unit Rs.125
ICC/unit/period Rs. 5
AGGREGATE PRODUCTION
PLANNING PROBLEM cont.
PLAN 1:
RT
OT
PLAN 2:
Jan
100
0
Feb
100
0
Mar
100
0
Jan
Feb
Mar
RT
100
75
100
OT
0
0
25
Tradeoff: Produce an unit in RT and carry it over as
inventory for T periods as against producing the
same unit in OT
AGGREGATE PRODUCTION
PLANNING PROBLEM cont.
FORMULATION:
Decision variables:
X1= no. of units to be produced in Jan RT
Y1 = no. of units to be produced in Jan OT
X2= no. of units to be produced in Feb RT
Y2 = no. of units to be produced in Feb OT
X3= no. of units to be produced in Mar RT
Y3 = no. of units to be produced in Mar OT
I1 = inventory at the end of Jan
I2 = inventory at the end of Feb
I3 = inventory at the end of Mar
AGGREGATE PRODUCTION
PLANNING PROBLEM cont.
FORMULATION cont.:
Minimise [100(X1+X2+X3) + 125 (Y1+Y2 +Y3)
+ 5(I1+I2+I3) ]
Subject to X1+Y1 - I1 = 100
I1+X2+Y2 - I2= 75
I2+X3 +Y3 -I3 = 125
X1, X2, X3 100
Y1, Y2, Y3 25
X1, X2, X3 , Y1, Y2, Y3 , I1, I2, I3 0
PRODUCTION PLANNING
STRATEGIES
Matching Demand Plan : Production
quantity in any month is equal to the demand
for the corresponding month. (as can be seen
in Plan 2)
Level Strategy: Implying that the production
quantity remains constant from month to
month. (as can be seen in Plan 1)
DETERMINING PRODUCTION
PLANNING STRATEGIES
Transportation Method
Jan
Feb Mar
Jan RT
OT
Feb RT
OT
Mar RT
OT
Demand
100
75
125
Cap
100
25
100
25
100
25
DETERMINING PRODUCTION
PLANNING STRATEGIES
Example 2: Demand forecast for the months Jan to
Apr are 5, 2, 3,4 units. The relevant
costs are,
(a)Production Cost = c(x) = 13+ 2 x, if x > 0
= 0 otherwise
(b) Inventory Cost = Rs.1/unit levied on the end of
month inventory.
Determine the minimum cost production plan.
SOLUTION
For 4 period problem with demand 5,2,3,4, the dominant sequences are:
14-0-0-0
Cost = Rs.33
10-0-0-4
Cost = Rs.34
7-0-3-4
Cost = Rs.41
7-0-7-0
Cost = Rs.32
N/F
Demand
W/R
Hours
Balance
Output
June
1000
120
580
1000
4000
580
3867
22
1478
133
300
2500
W over
350
1128
2500
+ 300 R
+148 R
N
July
5000
August
Remark
W over
8000
1280
148
8000
5000
600
400
5000
3000
400
2667
W over
53
247
333
+ 247 R
ASSEMBLY DATA
Activity Time(mins.)
Imm.Pred.
A. 2
B. 1
A
C. 2
A
D. 1
B,C
E. 3
D
Question: How many persons to employ and
activities to be assigned to each?
Desired output rate = 20 units/hour.
ASSEMBLY PLANNING
Network representation of the Assembly
1
B
1
2
D
A
2
C
3
E
LINE BALANCING
Given the data on an Assembly consisting of
(a)the activities comprising the Assembly,
(b) the time required to perform each activity and
( c) the precedence relationship governing the activities
(summarized in terms of immediate predecessor),
the objective of Line Balancing problem is to decide on the
allocation of the activities to various Work stations, so as
to achieve a desired out put rate, to maximize the Line
efficiency without violating the precedence constraints.
S
T
j
S1
Waiting cost under schedule S or S1 = waiting cost (WC) of Jobs other than I
and j, + WC of Job i and j. It may be noted that the WC of Jobs other than I
and j, is same in S and S1 and the difference in WC is because I and j.