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Optimal Disaggregation of Aggregate Production Plans

Author

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  • Klaus Zoller

    (University of the Witwatersrand, Johannesburg, South Africa)

Abstract

Aggregate Production Planning (APP) is concerned with a minimum cost adaptation of some production process to demand fluctuations, by means of controlling overall production rate (P) and workforce size (W). Disaggregation aims at allocating P and W to individual products such that an optimal sales program is obtained. A technique is developed which may be used for disaggregation when product contributions are nonlinear. It relies on decreasing marginal contributions as an evaluation criterion. In conjunction with an APP model, the technique can be used for a simultaneous derivation of aggregate and disaggregate decisions. This is illustrated by an application to a hypothetical production and sales planning problem.

Suggested Citation

  • Klaus Zoller, 1971. "Optimal Disaggregation of Aggregate Production Plans," Management Science, INFORMS, vol. 17(8), pages 533-549, April.
    • Handle: RePEc:inm:ormnsc:v:17:y:1971:i:8:p:b533-b549
    DOI: 10.1287/mnsc.17.8.B533
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    Cited by:

    1. Bitran, Gabriel R. & Tirupati, Devanath., 1989. "Hierarchical production planning," Working papers 3017-89., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    2. Vogel, Sebastian & Meyr, Herbert, 2015. "Decentral allocation planning in multi-stage customer hierarchies," European Journal of Operational Research, Elsevier, vol. 246(2), pages 462-470.
    3. Hax, Arnoldo C. & Meal, Harlan C., 1973. "Hierarchical integration of production planning and scheduling," Working papers 656-73., Massachusetts Institute of Technology (MIT), Sloan School of Management.

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