Identify a goods-producing or service-providing organization and discuss how it might make aggregate planning decisions using the variables described in Exhibit 14.3.

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EXHIBIT 14.3 Example Aggregate Planning Variables and Revenue/Cost Implications Aggregate Planning Decision Options Demand Management Pricing strategies Promotions and advertising Production Rate . Workforce Hiring . • Layoffs Overtime Undertime Subcontracting Full- and part-time labor mix Inventory • Anticipation (build) inventories • Allow stockouts • Plan for backorders Facilities, Equipment, and Transportation • Open/closed facilities and hours Resource utilization Carbon emissions . . Mode (truck, rail, ship, air) Capacity and resource utilization Revenue/Cost Implications Increased revenue and lower unit costs Economies of scale • Higher labor costs and premiums • Idle time/lost opportunity costs • Overhead costs and some loss of control Acquisition and training costs • Separation costs • Labor cost and productivity changes Inventory-carrying costs Lost sales (revenue) and customer loyalty costs Backorder costs and customer waiting costs • Variable and fixed costs Speed and reliability of service and delivery • Low-to high-utilization impact on unit costs Inbound and outbound costs per mode Number of full or partial loads