SALESANDOPERATIONSPLANNINGChapterNineteenCopyright?2021byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin
LearningObjectivesLO19–1:Understandwhatsalesandoperationsplanningisandhowitcoordinatesmanufacturing,logistics,service,andmarketingplans.LO19–2:Constructandevaluateaggregateplansthatemploydifferentstrategiesformeetingdemand.LO19–3:Explainyieldmanagementandwhyitisanimportantstrategy.19-2
WhatIsSalesandOperationsPlanning?Salesandoperationsplanningisaprocessthathelpsfirmsprovidebettercustomerservice,lowerinventory,shortencustomerleadtimes,stabilizeproductionrates,andgivetopmanagementahandleonthebusiness.Theprocessconsistsofaseriesofmeetings,finishingwithahigh-levelmeetingwherekeyintermediate-termdecisionsaremade.Thismustoccuratanaggregatelevelandalsoatthedetailedindividualproductlevel.Aggregatemeansatthelevelofmajorgroupsofproducts.19-3
MajorSalesandOperations
PlanningActivities19-4
SalesandOperationsPlanningActivities–OverviewSalesandoperationsplanningwascoinedbycompaniestorefertoaggregateplanning.Thenewterminologyismeanttocapturetheimportanceofcross-functionalwork.Aggregationonthesupplysideisdonebyproductfamilies,andonthedemandsideitisdonebygroupsofcustomers.19-5
TypesofPlanningLong-rangeplanningPlanningfocusingonahorizongreaterthan1year,usuallyperformedannuallyIntermediate-rangeplanningPlanningfocusingonaperiodfrom3to18months,timeincrementsareweekly,monthly,orquarterlyShort-rangeplanningPlanningcoveringaperiodfrom1dayto6monthswithdailyorweeklytimeincrements19-6
AggregateOperationsPlansSpecifiestheoptimalcombinationofProductionrate(unitscompletedperunitoftime)Workforcelevel(numberofworkersneededinaperiod)Inventoryonhand(inventorycarriedfrompreviousperiod)Productgrouporbroadcategory(aggr