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` Short-range plans (Detailed plans) Machine loading Job assignments ` Intermediate plans (General levels) Employment Output ` Long-range plans Long term capacity Location / layout 13-2 .

` ` ` Begin with forecast of aggregate demand Forecast intermediate range General plan to meet demand by setting Output levels Employment Finished goods inventory level ` ` Production plan is the output of aggregate planning Update plan periodically ± rolling planning horizon always covers the next 12 ± 18 months 13-3 .

` Resources Workforce Facilities ` Costs Inventory carrying Back orders Hiring/firing Overtime Inventory changes Subcontracting Demand forecast ` Policies ` Subcontracting Overtime Inventory levels Back orders 13-4 .

` ` Total cost of a plan Projected levels of inventory Inventory Output Employment Subcontracting Backordering 13-5 .

` Proactive Alter demand to match capacity ` Reactive Alter capacity to match demand ` Mixed Some of each 13-6 .

` Pricing Promotion Back orders New demand ` ` ` 13-7 .

` ` ` ` ` Hire and layoff workers Overtime/slack time Part-time workers Inventories Subcontracting 13-8 .

` ` ` ` Maintain a level workforce Maintain a steady output rate Match demand period by period Use a combination of decision variables 13-9 .

` Chase demand strategy: Matching capacity to demand.` Level capacity strategy: Maintaining a steady rate of regular-time output while meeting variations in demand by a combination of options. the planned output for a period is set at the expected demand for that period. 13-10 .