PRODUCTION PLAN STRATEGIES
✓ Chase strategy
Chase strategy means producing the
necessary quantities at any given time Although inventory levels remain steady,
output levels fluctuate to meet demand. The chase strategy has the benefit of
keeping inventories to a minimum. Goods are manufactured only when there is a
market for them, and they are not held in storage. As a result, the risks of
transporting inventories are avoided.
✓ Production levelling
Production levelling is continually producing an amount
equal to the average demand. For Instance, the company always maintain to
produce 10 000 units every month.
Sometimes demand is less than the amount produced and an inventory
builds up. At other times demand is greater and inventory is used up.
✓ Hybrid strategy
It is a combination between level and chase. For
example, in the first month maintain, half follow the demand then maintain and
repeat. At production levelling will maintain the production of 1000 units but
the demand can be up and down. So maybe company will have extra balance.
BASIC PPS
-
Total Production : Total Forecast + Back Order + Ending
Inventory - Opening Inventory
-
Total Forecast : + all demand
-
Ending Inventory : Opening Inventory + Production -
Demand
-
Back Order : given in the question
-
Opening Inventory : given in the question
-
Production : Total production / Total Number of
Production
WORKING DAYS PP
-
Total production = Total forecast + Backlog + Ending
Inventory – Opening Inventory
-
Total forecast = + All Demand
-
Back Order = Given in question
-
Production = Daily Production X Number of Working Days
-
Daily Production = Total Period / Total Number of
Working Days
-
Ending Inventory = Opening Inventory + Production –
Demand
-
Opening Inventory = Given in question
BACKLOG PPPS
-
Total Production = Total Forecast + Opening Inventory -
Ending Inventory
-
Total Forecast = + all demand
-
Opening Backlog = given in Question
-
Ending Backlog = Opening Backlog + all demand -
Production
-
Production = Total Production / Total Number of Period
Comments
Post a Comment