Question

How Aggregate Capacity Planning/ Management works?

(I need the answer to be in details not simple answer )

Answer 1

Aggregate Capacity Planning/Management (ACM) is the process by which the overall organizational resoure's capacity is managed. It helps in maintaining both capacity and the demand with cost minimization method. Normally the ACM is a three-step process;

a) Measure the demand and capacity for the planning period; ACM team will first measure the demand that is likely to arise in the future and the capacity of the resources that the organization has.

b) identify alternative capacity to manage risk; Once it is measured, then it is necessary to check if the resources available is enough to meet the demand. If not, alternatives have to be developed in order to meet the demand.

c) Choosing the best plan; from the developed alternatives, organization will select the best plan so that they can manage if any uncertainty occurs.

ACM is essential for any organization to understand the capacity of the plant in order to check if the demand can be met. If any issue, then alternatives has to be developed. So it will take time if the team goes on planning this at the action. In order to avoid such crises, ACM helps the organization to forecast the risk that may occur and develop the alternatives and back up plans to meet the demand and to increase the capacity at request(requirement).