Integrative Supply Chain Management

This report delves into integrative supply chain management, focusing specifically on aggregate planning. It details the essential information required for developing an effective aggregate plan, including demand forecasting, capacity determination, policy considerations, cost calculations, and the development of alternative plans. The report also examines the crucial trade-offs involved in creating an aggregate plan, such as balancing capacity (overtime, subcontracting, regular time), managing inventory levels, and accounting for potential backlogs or lost sales. The analysis highlights the need for careful consideration of these factors to optimize production schedules and meet customer demands effectively. References to relevant academic literature are provided to support the discussion.

Running Head:Integrative Supply Chain Management
Aggregate plan
[Document subtitle]
[DATE]
[Company name]
[Company address]

Integrative Supply Chain Management 1
Describe the information needed to produce an aggregate plan?
Aggregate planning is the concept of supply chain management which includes the
processes of analyzing, developing and maintaining the approximate schedule in terms of
overall operations of an organization.
The information that is needed in producing an aggregate plan is as follows-
 The demand forecasting needs to be done for each period in terms of production
cost and labor cost.
 The determination of the capacity has to be done in each period, and the capacity
should match demand in terms of overtime and subcontracting.
 Identification of company, union policies and departmental policies that are of
importance in a plan. (Umble,2003) For example- maintaining a stable workforce,
making of overtime policies, policies regarding to inventory level and the
planning swill also be done in terms of nature of employment within the industry.
 Calculation of inventory holding cost, backlog cost and the labor hours required
per unit.
 Development of alternative plans and computing the cost of each plan.
Explain the basic trade-offs to consider when creating an aggregate plan?
The basic tradeoffs that will be considered while making an aggregate plan are-
Measuring of Capacity in terms of overtime, subcontracting and the regular time-
the concept of capacity planning will increase the emphasis on the use of effective use of
capacity planning in terms of material requirements and information systems.
(Hax ,2013)A number of factors will affect the capacity of the process like the number of
workers, machine required, defects, errors, government regulations and the maintenance
cost.
Inventory-
With the increasing global supply networking, the companies are balancing tradeoffs in
terms of inventory management and the observance of planned production schedules in
order to meet the customer demand at the timing of deliveries.
Backlog/lost sales-
In the calculation of backlog or lost sales in terms of tradeoffs, the values of unfulfilled
orders in terms of unprocessed jobs will be considered. In addition to that, the workload
that is outside the production capacity in terms of an open order will also be considered in
this backlog sales.

Integrative Supply Chain Management 2
References:
Umble, E. J., Haft, R. R., & Umble, M. M. (2003). Enterprise resource planning:
Implementation procedures and critical success factors. European journal of operational
research, 146(2), 241-257.
Hax, A. C. (2013). Aggregate production planning. Handbook of operations research, 2,
127-172.