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  • Enumerate and Explain 3 Learnings On The Journal Article Reading (See To Do List Number 3) - Please Itemize (1, 2, 3) Your Answer

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    Lucita Cao
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    1. Applying a planned utilization factor as a decision parameter in aggregate production planning can reduce costs when facing stochastic customer demand, but it also increases excess capacity and the impact of forecast errors. 2. While hierarchical production planning structures are useful for managing decisions over different time horizons, treating upper level decisions as constraints based on deterministic models ignores the influence of real random variables in the production system. A planned utilization factor should be considered. 3. When simulation is not possible, a good planned utilization value can be identified by observing the convexity of the overall cost function. Starting with a moderate utilization factor and increasing over time until backorder costs become significant can reveal the value with the lowest overall costs and an acceptable service level

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    Aggregate Planning Reflection

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    1. Applying a planned utilization factor as a decision parameter in aggregate production planning can reduce costs when facing stochastic customer demand, but it also increases excess capacity and the impact of forecast errors. 2. While hierarchical production planning structures are useful for managing decisions over different time horizons, treating upper level decisions as constraints based on deterministic models ignores the influence of real random variables in the production system. A planned utilization factor should be considered. 3. When simulation is not possible, a good planned utilization value can be identified by observing the convexity of the overall cost function. Starting with a moderate utilization factor and increasing over time until backorder costs become significant can reveal the value with the lowest overall costs and an acceptable service level

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    Enumerate and Explain 3 Learnings On The Journal Article Reading (See To Do List Number 3) - Please Itemize (1, 2, 3) Your Answer

    Uploaded by

    Lucita Cao
    1. Applying a planned utilization factor as a decision parameter in aggregate production planning can reduce costs when facing stochastic customer demand, but it also increases excess capacity and the impact of forecast errors. 2. While hierarchical production planning structures are useful for managing decisions over different time horizons, treating upper level decisions as constraints based on deterministic models ignores the influence of real random variables in the production system. A planned utilization factor should be considered. 3. When simulation is not possible, a good planned utilization value can be identified by observing the convexity of the overall cost function. Starting with a moderate utilization factor and increasing over time until backorder costs become significant can reveal the value with the lowest overall costs and an acceptable service level

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    © All Rights Reserved
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    Enumerate and explain 3 learnings on the journal article reading (see to do list number 3).

    Please itemize (1, 2, 3) your answer.


    As I finish reading the research paper entitled, Effects of forecast errors on optimal
    utilisation in aggregate production planning with stochastic customer demand, I have learned
    that:
    1. The preexisting APP optimisation problem is worsened by making use of a planned
    utilisation factor in order to mitigate the effect of an assumed deterministic setting when it is
    facing stochastic or random customer behavior. In fact, applying such planned utilisation
    factor as a decision parameter cause a high cost reduction potential. Accordingly, different
    production system structures, varying sets of different demand patterns and costs rates the
    planned utilisation factor, wherein the excess capacity is shown to increase with respect to
    forecast error.
    2. Hierarchical structure of production planning is advantageous in terms of assigning various
    decision variables to their corresponding time horizons, which ensures their manageability,
    however, this structure emphasizes that upper level decisions serves as the constraints for
    lower level decisions seeing as deterministic definite decision problems are utilized for
    long-term planning, when in fact the real production system is being influenced by random
    variables. In lieu with this, a planed utilisation factor must be taken into consideration in an
    attempt to solve this deterministic aggregate planning problem.
    3. A practical approach in order to identify a good plan utilisation value can be inferred from
    the observation of the convex overall cost function in cases where simulation is not
    realizable. Such process begins with the existence of a moderate planned utilisation factor
    which can be increased as time goes by, until such time when backorder costs can be
    deemed significant and overall costs increase. In conclusion, the value possessing the least
    overall cost while still having an acceptable service level is the best choice to be chosen
    among all presented alternatives.

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