What is aggregate planning and what is its' purpose?

What is aggregate planning and what is its' purpose? What is intermediate planning; and what are the three (03) phases of intermediate planning?

Expert Solution

Aggregate Planning the process of developing operations plan for an organization for an extended period (Generally up to 18 months). This planning is made keeping the mind the sales forecasts, inventory levels, production levels, etc over a period of time.

The purpose of Aggregate Planning is to have an optimized utilization of organizational resources over the extended period. Aggregate Planning helps organizations to prepare better for changes in demand and forecasts.

Intermediate Planning is organizational planning generally from a period of one year to five years. Intermediate planning provides guidelines for managers to plan daily work activities as per organizational strategy.

The three phases of Intermediate planning are as follows:

Business Plan Adoption- It is the process of adopting a business plan to meet the requirements of Intermediate planning
Aggregate planning- - It is the process of planning for optimized utilization of resources and inputs to meet demands and forecasts.
Master Schedule- It is the preparation of item wise schedules for items required as per aggregate planning, and matching them with demands and forecasts.

keosha answered 2 years ago

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