Optimal Disaggregation of Aggregate Production Plans

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.

Decentral allocation planning in multi-stage customer hierarchies

“…Often, their focus lies on aggregate production planning and related disaggregation schemes for multiple and interdependent types of resources. An early example with aggregation and disaggregation of workforce and inventory planning is Zoller (1971).…”

Hierarchical Integration of Production Planning and Scheduling

“…Prior to designing the hierarchical system we are about to describe, we considered the attractiveness of using other approaches, primarily those of Landon and Terjung [131, Connors [5], Zangwill [17], and Zoller [18]. We found, however, that those approaches were either difficult to implement or they were based on a given level of aggregation, ignoring the problems associated with detailed scheduling.…”

Aggregate versus disaggregate production planning: a simulated experiment using LDR and MRP

“…Researchers have long recognized that developing optimal aggregate production plans, per se, is not sufficient for solving real problems; these plans must be disaggregated into specific schedules for specific products. Consequently, a thrust of current research (Bergstrom and Smith 1970, Hax and Meal 1975, Shwimer 1972, Zoller 1971) is the 'disaggregation problem' which attempts to relate production planning decision at the aggregate and disaggregate levels.…”

“…The 'aggregate-:Disaggregate' group of teams were given the optimal values for production and work-force in each period, as obtained from LDR. They were instructed on the disaggregation procedure which was developed in the spirit of the optimal disaggregation technique suggested by Zoller (1971). In each case, demand was generated from a function containing a stoehastic element (explained below) so that, while the general demand pattern was known, there was substantial variation in demand due to chance.…”