Vary the hours worked: Maintain the stable workforce, but permit idle time when there is a slack and pe overtime (OT) when demand is 'peak'. Vary inventory levels: Demand fluctuations particularly increase in demand can be met by large amour inventory Subcontract: In case of upward shift in demand from low level. Required production rates can be met by using capacities available with the external vendors. This is also known as subcontracting. Aggregate planning guidelines: 1. Determine corporate policy regarding controllable variables. 2. Use a good forecast as a basis for planning. 3. Plan in proper units of capacity. 4. Maintain the stable workforce. 5. Maintain needed control over inventories. 6. Maintain flexibility to change. 7 Respond to demand in a controlled manner. 8. Evaluate planning on a regular basis. v5 Properties of Aggregate Planning: To facilitate the production manager the aggregate planning must have the following characteristics: (i) Both output and sales should be expressed in a logical overall unit of measuring. For example, an automo manufacturing company can say 1000 vehicles per year, without giving the number of each variety of veh Similarly a paint industry can say 10,000 litres of paint and does not mention the quantities of each varie colour. (ii) Acceptable forecast for some reasonable planning period, say one year. (ii) A method of identification and fixing the relevant costs associated with the plant. Availability of alterna for meeting the objective of the organization. Ability to construct a model that will permit to take optimal or near optimal decisions for the sequenc planning periods in the planning horizon. (iv) Facilities that are considered fixed to carry out the objective Illustration 11. ABC. Co. has developed a forecast for the group of items that has the following demand pattern 1 2 3 4 emand 270 220 470 670 450 270 200 370 Cumulative demand 270 490 960 1630 2080 2350 2550 2920 5 6 7 8 The firm estimates that it costs * 150 per unit to increase production rate * 200 per unit to decrease the produc rate, 50 per unit per quarter to carry the items in inventory and 100 per unit if subcontracted. Compare the of the pure strategies