Problems Related To Aggregate Planning
Smoothing
- Smoothing refers to costs that result from changing production and workforce levels from one period to the next.
Bottleneck Problems
- It is the inability of the system to respond to sudden changes in demand as a result of capacity restrictions.
Planning Horizon
- The number of periods for which the demand is to be forecasted, and hence the number of periods for which workforce and inventory levels are to be determined, must be specified in advance.
Treatment of Demand Aggregate planning methodology requires the assumption that demand is known with certainty. This is simultaneously a weakness and a strength of the approach.
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