Aggregate Planning Technique at a Mixed Seasonal Beverages Production Plant, A Case Study

Abstract

Sizable proportion of production organizations are interested in adopting advanced production planning methods. Planners use aggregate planning to achieve a production plan that will effectively utilize the organization’s resources to satisfy expected demands. The production planning of mixed seasonal products is usually a complex assignment. A beverages plant is producing three kinds of beverages with variable demand month-wise according to seasons change. As a result, over-time is needed through some months, while, under-time is happening through others. In this paper, cost analysis is conducted for the present production plan, then operations research approaches were used to create three models to generate a better production plan for that company with respect to cost. These models include transportation model, linear program model, and a dynamic model. A comparison is made between the three models to investigate the suitability in terms of cost reduction and adoptability.
The LP model seems more adequate for this plant with an encouraging cost reduction rate. The study takes into account, among others, the costs of overtime/under-time, hiring /firing, inventory holding cost, etc. Finally, this study suggests to adopt production plan that resulted from the linear production model in this study with 6.23% cost reduction among current production plan. All basic financial data used in calculations were provided by the manufacturer without any interfere from the researcher.