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Aggregate planning for seasonal demand : reconciling theory with practice

Buxey, Geoff 2005, Aggregate planning for seasonal demand : reconciling theory with practice, International journal of operations and production management, vol. 25, no. 11, pp. 1083-1100, doi: 10.1108/01443570510626907.

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Title Aggregate planning for seasonal demand : reconciling theory with practice
Author(s) Buxey, Geoff
Journal name International journal of operations and production management
Volume number 25
Issue number 11
Start page 1083
End page 1100
Publisher Emerald Group Publishing Limited
Place of publication Bingley, England
Publication date 2005
ISSN 0144-3577
1758-6593
Keyword(s) corporate strategy
production planning
productive capacity
Summary Purpose: The paper reports on the ramifications for production planning when monthly sales exhibit predictable seasonal highs and lows. The literature first acknowledged and dealt with the (aggregate planning) problem 50 years ago. Nevertheless, there is neither evidence that industry has adopted any of the mathematical techniques that were subsequently developed, nor a convincing explanation as to why not. Hence this research sets out to discover the methods manufacturers use to cope with seasonal demand, and how germane the published algorithms really are.

Design/methodology/approach
: Forty-two case studies were compiled by interviewing senior managers and then conducting plant tours. No prior assumptions were made and the list of questions covered the gamut of production planning.

Findings
: The main finding is that manufacturers select a straightforward production strategy, right from the outset, so the fundamental cost-balancing format is not relevant. The majority pick a “chase” strategy, since most organizations subscribe to a “just in time” ethos. Whenever a different strategy is preferred the rationale springs from skilled labour considerations or binding facilities constraints. The chosen strategy serves as a road map for resources acquisitions, and the master production schedule is constructed directly. So, the complex issue of how to disaggregate an optimal aggregate plan never even arises. Managers do not seek perfect solutions, but strive to eliminate, or contain, the most significant marginal costs. The nature of the business determines the most appropriate tactics to employ.

Originality/value: These findings break the mould as far as orthodox aggregate planning is concerned and show why theory is at odds with practice, whilst reaffirming the importance of concepts such as “flexibility”, “integration”, and “just-in-time production”.
Language eng
DOI 10.1108/01443570510626907
Field of Research 150312 Organisational Planning and Management
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2005, Emerald Group Publishing Limited
Persistent URL http://hdl.handle.net/10536/DRO/DU:30003217

Document type: Journal Article
Collection: School of Management and Marketing
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