The aggregate forecast may look like this: Aggregate planning example 1Ī mobile phone manufacturer planning for the first half of 2022 would consider fluctuating trends and changes that may affect sales and marketing in the first quarter of the new year. Here are a few aggregate planning examples to help you understand the concept of aggregate planning better. It would, instead, be concerned with the labor and machine hours available in a given period."Īggregate planning helps teams and managers operate at maximum efficiency by influencing and adjusting workload and capacity to match changing demands. Thus, the aggregate plan for a car factory would consider the total number of units produced per month but would not be concerned with scheduling individual models or colors. Oxford Reference defines aggregate planning as "an approach to planning that enables overall output levels and the appropriate resource input mix to be set for related groups of products over the near to medium term. In project management, it is used to manage and schedule activities related to capacity and demand, such as analyzing requirements, deploying resources, and maintaining the set timeline of projects and operations. What is aggregate planning?Īggregate planning is the process of balancing the relationship between demand and capacity to create stability in a workflow. If demand frequently outweighs capacity, it could lead to poor outcomes, missed opportunities, and a strain and possible breakdown of available resources. If capacity frequently exceeds demand, there's wastage. You must conduct effective aggregate planning and strategy to ensure your team delivers successful products efficiently and consistently. Demand is the number of units required to fulfill customer or stakeholder needs.Capacity is the number of units that can be produced within a timeframe.
Good managers develop a sixth sense for achieving an intricate balance between the two, maximizing their chances of project success over time.īefore we go on, let's define both words: Managers must learn to forecast a balance between demand and capacity to make sound decisions when planning projects.