What is Aggregate Planning?
A firm can make its business Plans and doing demand forecast. Once planning done then firm working on backward for arrange raw material. Firm doing planning annually and quarterly for arrangement of labor, raw material, and working capital etc. mostly aggregate planning doing for period of 6 months to 18 months. Aggregate Planning as an Production Tool Aggregate planning helps adjust balance between operation goal, financial goal and overall strategic objective of the firm. It serves as a platform to manage capacity and demand planning. In a scenario where demand is not matching the capacity, an organization can try to balance both by pricing, promotion, order management and new demand creation. In scenario where capacity is not matching demand, an organization can try to balance the both by various alternatives such as Laying off/hiring excess/inadequate excess/inadequate excess/inadequate workforce until demand decrease/increase. Including overtime as part