What is aggregate planning?

Aggregate planning refers to the practice of developing a production plan for an organization over a set time, usually in the range of three months to a year. The main objective of aggregate planning is to balance inventory status and production with consumer demand while reducing costs and optimizing all resources and channels.

Aggregate planning also often involves key decisions concerning:

• Size of workforce

• Workforce scheduling

• Production scheduling

• Inventory levels

• Production capacity

Aggregate planning is used in several different industries, some common ones include:

• Manufacturing

• Services

• Healthcare

This type of planning is normally used by organizations to help them prepare for seasonal shifts or fluctuations in demand or to manage supply chain disruptions. It is an important process for organizations because it helps to ensure they can meet consumer demands while balancing supply and demand, and reducing related costs.

Here are some common aspects of aggregate planning:

• Forecasting demand

This aspect involves forecasting consumer demand for products, goods, or services to make sure that there is adequate inventory to meet the consumer's needs.

• Inventory management

Figuring out the optimal levels of inventory for a product or good for meeting consumer demands and reducing inventory costs.

• Production planning

Calculating the correct amount of a product or good that must be produced to meet consumer demands, while also avoiding superfluous inventory.

• Supplier management

Choosing and monitoring suppliers to make sure that these entities meet delivery schedules, cost targets, and quality standards.

Coordinating both sales and production operations to make sure that the supply of products is meeting the consumer demand, while also balancing inventory expenses and production limitations.