Instructions

Identify a goods-producing or service providing organizations and explain how it will make aggregate planning decisions using the variables describes in Exhibit 13.3. e EXHIBIT 13.3 Example Aggregate Planning Variables and Revenue/Cost Implications Aggregate Planning Decision Options Revenue/Cost Implications Demand Management • Pricing strategies Increased revenue and lower unit costs • Promotions and advertising • Economies of scale Production rate • Overtime • Higher labor costs and premiums Undertime • Idle time/lost opportunity costs • Subcontracting • Overhead costs and some loss of control Workforce • Hiring • Acquisition and training costs • Layoffs • Separation costs • Full- and part-time labor mix Labor cost and productivity changes Inventory . Anticipation (build) invece e Inventory-carrying costs • Allow stockouts * Lost sales (revenue) and customer loyalty costs • Plan for backorders Backorder costs and customer waiting costs Facilities, Equipment, and Transportation @ Variable and fixed costs • Open/closed facilities and hours Speed and reliability of service and delivery • Resource utilization Low-to high-utilization impact on unit costs • Carbon emissions • Inbound and outbound costs per mode • Mode (truck, rail, ship, air) • Number of full or partial loads • Capacity and resource utilization

Explain the difference between Rational and Emotional Appeals.

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