...discussing the importance of aggregate planning strategies. The aggregate planning strategies has as its primary mission, set production levels in aggregated units along of a time horizon that generally ranges from 3 to 18 months, so as to achieve meet the needs identified in the long-term plan, keeping while minimum levels of costs and a good level of customer service. In aggregate planning various mathematical techniques can be used to obtain feasible schedules. With planning methods is to optimize the use of resources avoiding sudden changes in production and at the same time reduce the total cost planning. The importance of aggregate planning in the process of managing an organization is to establish plans for short and medium term to meet the requirements of the production forecast when the capacity from the standpoint of plant or equipment is relatively fixed. INTRODUCTION In this paper I’m going to talk about Aggregate Planning Strategies. The aggregate planning serves as a link between the decisions about the facilities and programming. The decision of the aggregate planning establishes production levels overall medium term, which is why it is necessary that the company these processes is implemented, making decisions and policies that relate to overtime, hiring, layoffs, outsourcing and levels inventory. Knowledge of these factors will allow us to determine production levels involved and the mix of resources used. Like the aggregate planning other types of control...
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...The Advantages of Aggregate Planning Aggregate planning is a forecasting technique that businesses use in an attempt to predict the supply and demand of their products and services. Mainly, this is done in an effort to save money, streamline operations and increase productivity. To accomplish this, businesses use an aggregate planning model to develop a game plan that will assist them with determining their staffing requirements, materials needed, estimated timelines and budget costs so they can better plan ahead. Minimize Staffing Fluctuations By using aggregate planning to forecast production demand, businesses are better able to predict their staffing requirements. Businesses that need additional employees on a temporary basis tend to fill these positions with workers from temporary employment agencies. Through proper forecasting, a business will be able to reduce or eliminate the need to hire these extra workers. This will save the business both time and money as it won't need to pay the additional fees to the staffing agency and it won't have to pay its own workers to train the new additions. Reduce Overhead Excess inventory costs businesses a lot of money. Additional materials will need to be stored, and having finished products laying around increases the likelihood of damage to the products before they reach the customer. Adhering to an aggregate planning model can help businesses operate in a leaner manner. Managers will be able to better anticipate how much product...
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...Chapter 8: Aggregate Planning in a Supply Chain Exercise Solutions : We define a comprehensive set of decision variables that are utilized in problems 8-1 to 8-3 depending on the problem context. Decision Variables: Ht = # of workers hired in month t (t = 1,..,12) Lt = # of workers laid-off in month t (t = 1,..,12) Wt = # of workers employed in month t (t = 1,..,12) Ot = # of hours of overtime in month t (t = 1,..,12) It = # of units (000s) held in inventory at the end of month t (t = 1,..,12) Ct = # of units (000s) subcontracted in month t (t = 1,..,12) Pt = # of units (000s) produced in month t (t = 1,..,12) Parameters: Dt = # of units (000s) demanded in time period t (t = 1,…12) Problem 8-1: Minimize [pic] Subject to: Inventory constraints: [pic] [pic] Overtime constraints: [pic] Production constraints: [pic] Workforce constraints: [pic] (a) Worksheet 8.1 provides the solution to this problem and the corresponding aggregate plan. The total cost of the plan is $360,400,000. (b) If the number of overtime hours per employee were increased from 20 to 40 it would result in decreasing the total cost to $356,450,000. So, it is advantageous to do it. (c) If the number of employees is decreased to 1200 and the overtime hours per employee are held at 20 and 40 then the total costs of the plan are $363,324,000 and $357,422,000, respectively. If the number of employees is increased to 1300 and the overtime hours per employee...
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...1 Supply chain: the facilities, functions, and activities that are involved in producing and delivering a product or service from suppliers to the end customer. focusing on integrating and managing the flow of goods, services, and information through the supply chain in order to make it responsive to customer needs while lowering total costs. Supply chain management: Supply chain strategy: designing a firm’s supply chain to meet the competitive priorities of the firm’s operations strategy. 2 The goal is to reduce costs as well as increase performance which 3 can be accomplished by better forecasting, inventory management, operations planning and scheduling, and resource planning. Dynamic sales volumes Customer service levels Service/product proliferation •One of the most costly operating aspects of supply chains is trying to meet the needs of volatile sales volumes. •Involves excessive inventories, underutilized personnel, expensive delivery options to meet customer demands on time. •Questions such as “What service level should be guaranteed?” or “How speedy must our deliveries be?” need collaborative discussion from the sales, marketing, and finance groups. •The answers will affect on the design of the supply chain, particularly its points of supply and the choice of suppliers. •The sales and marketing groups can create new services or products because they are closely in touch with customers and their needs. 4 5 Capital investments in machinery...
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...Problems on Aggregate Production Planning 1. Planners of a company have obtained information regarding the forecasted demand of a product as follows: Period 1 2 3 4 5 6 Total Forecast 200 200 300 400 500 200 1800 Costs Regular time: $2/unit Overtime: $3/unit Subcontract: $6/unit Inventory: $1/unit Backorder: $5/unit They now want to evaluate a plan that calls for a steady rate of regular-time output, mainly using inventory to absorb the uneven demand but allowing some backlog. Overtime and subcontracting are not used because they want steady output. They intend to start with zero inventory on hand in the first period. Prepare an aggregate plan and determine its cost using the preceding information. Assume a level output rate of 300 units per period with regular time. Note that the planned inventory is zero. There are 15 workers, each can produce 20 units per period. 2. Suppose that the regular output rate drops to 290 units per period in the above problem due to an expected change in production requirements. Costs will not change. Prepare an aggregate plan and compute its total cost for each of these alternatives: a. Use overtime at a fixed rate of 20 units per period as needed. Plan an ending inventory of zero for period 6. Backlogs cannot exceed 90 units per period. b. Use subcontracting at a maximum rate of 50 units per period; the usage need not be the same in every period. Have an ending inventory of zero in the last period. Again backlogs cannot...
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...Collaborative Consumption: Is it a disruptive business model? Introduction Airbnb (www.airbnb.com) started in August 2008 as a booking service letting private, spare space around the world, a marketplace that connects people who need temporary living spaces, to people who have extra spaces. The extra spaces could be a spare bed, a room, an apartment or even a villa. In five years’ time they now have over 10 million nights booked, have over 300,000 listings worldwide, operate over 33,000 cities in 192 countries and have over 600 million Social connections. This idea is called by various terms as “collaborative consumption”, the “asset-light lifestyle”, the “collaborative economy”, “peer economy”, “access economy” or “sharing economy”. Like Airbnb, one can rent automobiles, kennels, rides, solar power, toys, books, art, fashion, movies, sugar and spices, food, storage, lending, bartering, education and even maids, friends and nannies ! Google, General Motors, Avis, BMW, Toyota, Barclays, Ford, Radiohead and many other big brands and organizations have all jumped into the ‘collaborative consumption’ bandwagon to supplement their business strategies Objective of study Understand and explore the reasons behind this consumer behavior. What made it possible now and not earlier? What are the regulatory and other challenges? Why are large organizations in mainstream business investing in this model? Is perceived as a threat or an opportunity? Is it an attractive industry...
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...the literature.Yet differences in opinion in the academic literature leave the door open for different choices that can compromise the resulting rankings. The New GCI is generated in a two-stage process. First, the weights for aggregating individual indicator scores to an overall country score are obtained using panel data for over 130 countries and up to 7 years (2001–07).The weights obtained from estimating the model are going to be kept constant over time. Additional years of data will be used to check the stability of the model over time. Second, the index score for a particular country in a given year is calculated by summing its weighted indicator values. The New GCI model uses principal component analysis (PCA) to aggregate individual indicators (or categories of indicators).The premise of the PCA method is that within a “conceptual category,” indicators are highly correlated and related to the underlying phenomenon that is being measured.Within the area of microeconomic competitiveness, the degree of correlation between indicators is very high.The New GCI model thus applies a two-step PCA procedure. First, a separate aggregation is computed for COS and for each of the four components of the NBE. Second, these five components are aggregated into an overall score for microeconomic competitiveness.75 Figure 7 provides a sample...
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...about the Clinic (i.e., what's the good news and what's the bad news)? Analyze in the aggregate and for each product line, as appropriate. If an analysis applies to more than one product line, you may combine product lines in your discussion for convenience. Use of bullet points are fine and, to the extent possible, encouraged. Profit (total) variance = actual profit – static profit Revenue= Member months x premium We see that the overall profit is -$329,366 than what was expected . What caused this variation? When it comes to revenue, ideally HMOs would like to see enrollment high and utilization low along with costs down making profit high. The main contributors to profit variances are: Revenue issues, Cost issues, or BOTH. Revenue – Cost= Profit. HMOs make money through member months (enrollment) x premiums. • The main issue with total profit variance is insufficient revenue from PC Commercial and increased costs from the other three product lines due to high utilization from which created negative variances causing decreased profits. • The static budget expected margin was 12.7% The actual profit was significantly less than static budget with the actual total margin cost being at 2.7% Revenue Variance: • The PMPM rate increased in PC comm. the biggest provider, which impacted its revenue through decreased enrollment. Its enrollee amounts were less than the aggregates. SH comm. also had increased its PMPM rate but also increased revenue through number...
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...Case 1 SPI states that it has a total of seven operating segments, which are shampoo, cosmetics, diapers, paper towels, Jazzy Juice, Blasto Energy Drink, and fruit & granola snacks. These seven items can be considered operating segments, because each one of these meet the three requirements of operating segments. The three requirements are: 1) It engages in business activities which it may even earn revenues and incur expenses; 2) Its operating results are regularly reviewed by the public entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; 3) Its discrete financial information is available. All seven items have revenues and incur expenses according to the financial statements. The auditor finds a press release from the chief decision maker and states that, “On page 6 of the annual reports of your (SPI) annual report, you (chief decision maker) identify seven product lines.” Finally, all the information is available because they are in the annual reports. According to FASB Accounting Standards Codification 280-10-50-11: Two or more operating segments maybe aggregated into a single operating segment if they have similar economic characteristics and if they are similar in all of the following: Nature of products and services. Nature of the production processes. Type or class of customer for their products and services. Methods of distribution. Nature of regulatory environment if applicable. After...
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...I will be happy to assist you, based on the information it is clear that the company does indeed have different operating segments. This was determined from ASC 280-10-50-1; within the codification there are three characteristics that the company must have. For clarity I have posted them below. 1. a. It engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity). 2. b. Its operating results are regularly reviewed by the public entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. 3. c. Its discrete financial information is available For SEC reporting purposes we find guidance from ASC 280-10-50-11 regarding aggregation criteria as well as 280-10-50-12 which sets forth the qualitative thresholds. The nature of the entire business in which the company operates in is very similar from the type of customer they serve to the service they deliver everything is very standardized. So after careful analysis I have determined that the aggregation criterion is met. The threshold requirements have been met by certain operations in the company; upon analysis of the information provided it was determined that Big Islands Georgia, Big Islands North Carolina, Big Islands Washington, Still Water Thrills Orlando, Island Adventure Cove, and Still Water Thrills Charlotte all exceed...
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...can be aggregated. Provide support for your initial thoughts regarding aggregation of operating segments and identify additional information that may be needed in order to reach a conclusion. According to ASC 280-10-50-(11-13) Two or more operating segments may be aggregated into a single operating segment if they are similar in the following areas: • The nature of the products and services • The nature of the production processes • The type or class of customer for their products and services • The methods used to distribute their products or provide their services • If applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilities According to these guidelines I feel like SPI can aggregate Jazzy Juice and Blasto Energy Drinks, I think this because even though their gross margins aren’t very close they are...
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...com/epaper/viewer.aspx The Philippines has achieved considerable progress in tackling corruption and upgrading competitiveness, which makes it earn the respect of world economists, thanks to the high confidence enjoyed by President Aquino. From the “Sick Man of Asia” in the past, the country is now considered as the possible “Tiger Economy” before long. The President has stated that in the second half of his term, the government will focus on providing opportunities for the creation of quality employment and livelihood, since these are the country’s pathway out of poverty. Building on the substantial improvements so far reached by the Cabinet economic cluster, the various business organizations have reiterated the need for sectoral economic planning of products and services, which have the potentials to be globally competitive and where the country can benefit from the global economies of scale that will meet the challenging targets of generating 14.6 million employment and livelihood until 2016. The Philippines will become a global player in a broad field of products and services, which will benefit its resources (both human and natural), financially, technologically, socially and culturally. It will provide the seed of economic renaissance, which was proposed by the combined local and joint foreign business chambers two years ago. The approach is similar to the ADB’s “Taking the Right Route to Inclusive Growth”—a strategy supported by the National Competitiveness Council’s private...
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...prices and wages are flexible both upward and downward. Use the following short-run aggregate supply schedules to answer the next question(s). 11. Refer to the information above. If the price level unexpectedly increases from 100 to 125, the level of real output in the short run will: A. rise from $500 to $560. B. fall from $500 to $440. C. fall from $560 to $500. D. rise from $440 to $500. 12. Refer to the information above. In the long run, an increase in the price level from 100 to 125 will: A. increase real output from $500 to $560. B. decrease real output from $500 to $440. C. change the aggregate supply schedule from (a) to (c) and result in an equilibrium level of real output of $560. D. change the aggregate supply schedule from (a) to (b) and result in an equilibrium level of real output of $500. 13. Refer to the information above. If the price level unexpectedly declines from 100 to 75, the level of real output in the short run will: A. rise from $500 to $560. B. fall from $500 to $440. C. fall from $560 to $500. D. rise from $440 to $500. 14. Refer to the information above. In the long run, a fall in the price level from 100 to 75 will: A. decrease real output from $500 to $440. B. increase real output from $500 to $620. C. change the aggregate supply schedule from (a) to (c) and produce an equilibrium level of real output of $500. D. change the aggregate supply schedule from (a) to (b) and produce an equilibrium level of real output...
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...Economic Forecasting Economic Forecasting Gathering historical economic data as well as economic forecast data can be a very important and useful tool for a business, business research, and planning. There are several resources available in which a company can access this type of information for their advantage. For instance, through archiving data, collecting and running records, recollecting, economic data and forecast service providers or analytics, and other secondary resources. One useful source is the U.S. Small Business Administration. Their website lists multiple economic data resources tailored to different variables such as inflation, consumer reports, price index, accounts data, and the U.S. Census Bureau just to name a few. Furthermore, you can even access economic issues discussed at the White House and the plans intended to improve economic conditions. On the U.S. Small Business Administration’s website, there are very useful quantitative and qualitative forecasting factors. The whole website has a slew of quantitative factors with a lot of helpful statistics. Some important statistics to look at would be the trade and income figures. Trade statistics indicate how much money and product are being imported and exported within different time frames. It also gives an estimate into international transactions that are open at the moment. Income statistics give individuals access to know about different salary levels based on categories...
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...Tutorial Test S1 2014 MACROECONOMICS 1 ECON 1102 School of Economics Australian School of Business Name:_____________________________________________________________________ Student number:_____________________________________________________________ Tutorial day/time:____________________________________________________________ Tutor’s name:_______________________________________________________________ 1. You must provide student ID before you begin the test. 2. You will have 30 minutes to answer all of the questions. 3. A non-programmable calculator may be used. 4. Answer the questions in the space provided on this test paper. 5. All electronic communication devices must be switched off. 6. Tutorial tests will be constructed from the following pool of short-answer questions. 7. Each Tutorial test will be comprised of a sufficient number of short-answer questions to add-up to a total of 20 marks. 8. The marks for each question provide an indication of how much is required to answer the question. 9. Tutorial tests may contain questions on different topics. 10. The set of questions used will vary across Tutorial tests. 11. Where questions have numerical parts, the actual numbers used will be changed for the Tutorial tests. 12. Since the following questions will be used; lecturers, tutors and PASS leaders will not provide help in directly answering the questions. The following equations describe planned spending for a closed economy. ( ) (a) Write out the equation for...
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