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Operations and Supply Chain Management - Planning & Control

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Class 08 – Planning & Control

BUFW M570-01W: Operations and Supply Chain Management Planning & Control:
Chapter 19 – Sales & Operations Planning Chapter 20 – Inventory M anagement

Learning Objectives
Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans. Construct and evaluate aggregate plans that employ different strategies for meeting demand. Explain yield management and why it is an important strategy.

Joseph Khamalah, Ph.D.

What Is Sales and Operations Planning?
Sales and operations planning is a process that helps firms provide better customer service, lower inventory, shorten customer lead times, stabilize production rates, and give top management a handle on the business. The process consists of a series of meetings, finishing with a high-level meeting where key intermediate-term decisions are made. This must occur at an aggregate level and also at the detailed individual product level.

Major Sales & Operations Planning Activities

Aggregate means at the level of major groups of products.



Sales & Operations Planning Activities – Overview
Sales and operations planning was coined by companies to refer to aggregate planning.

Types of Planning
Long-range planning • Planning focusing on a horizon greater than 1 year, usually performed annually Intermediate-range planning • Planning focusing on a period from 3 to 18 months, time increments are weekly, monthly, or quarterly Short-range planning • Planning covering a period from 1 day to 6 months with daily or weekly time increments
5 6

The new terminology is meant to capture the importance of cross-functional work. Aggregation on the supply side is done by product families, and on the demand side it is done by groups of customers.


Class 08 – Planning & Control

Aggregate Operations Plans...

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