Chapter 11, Problem 1DRQ

What three levels of planning involve operations managers? What kinds of decisions are made at the various levels?

Summary Introduction

To determine: The three levels of planning and the kind of decisions that can be made at each level.

Introduction: The aggregate plan is the output of sales and operations planning. The major concern of aggregate planning is the production time and quantity for the intermediate future. Aggregate planning would encompass a time prospect of approximately 3 to 18 months.

Explanation of Solution

The three levels of planning and the kind of decisions that can be made at each level are as follows:

Long range, intermediate, and short-range are the three levels of planning.

Long-range:

The kind of decisions the operations managers made at long-range level are as follows:

Product design

Location

Work system design and

Long-range capacity

Intermediate:

The kind of decisions the operations managers made at intermediate level are as follows:

Finished goods inventories

Output

Subcontracting

Levels of employment

Backorders

Short-range:

The kind of decisions the operations managers made at short-range level are as follows:

Machine loading

Work schedules

Purchase order quantities

Job sequencing

Production lot sizes

Job assignments