ABSTRACT
In a supply chain, companies must anticipate demand and determine how to meet it. To be effective, aggregate planning must be based on accurate demand forecast. Aggregate planning helps companies determine ideal levels of production, subcontracting, inventory, backlog, workforce, and even pricing over a specified time horizon. The output of aggregate planning is also of value to both downstream and upstream supply chain partners, because it defines the demand for suppliers and establishes supply constraints for customers. The most important element of aggregate planning is the capacity of a company’s production facility. The task of aggregate planning is to find the optimal values of the production level, workforce size, and subcontract quantity that minimizes the total costs. There are three basic aggregate planning strategies, namely, level, capacity, and chase. Gurobi Optimizer is a software tool that can be used to solve aggregate planning problems based on a linear programming approach.
