Chapter six

Overview of operational planning activates

Every organization must plan its’ activates at several level and operate these as a system. The
time dimension is shown as long, intermediate and short range.
Planning and control is concerned with the reconciliation between what the market requires and
what the operation’s resources can deliver. Planning and control activities provide the systems,
procedures and decisions which bring different aspects of supply and demand together. In this
part of the book, the different aspects of supply and demand, and different circumstances under
which supply and demand must be reconciled, are treated in each chapter. But in every case, the
purpose is the same – to make a connection between supply and demand that will ensure that the
operation’s processes run effectively and efficiently and produce products and services as
required by customers.
The difference between planning and control
The division between planning and control is not clear, either in theory or in practice. However,
there are some general features that help to distinguish between the two. Planning is a
formalization of what is intended to happen at some time in the future. But a plan does not
guarantee that an event will actually happen. Rather it is a statement of intention. Although plans
are based on expectations, during their implementation things do not always happen as expected.
Customers change their minds about what they want and when they want it. Suppliers may not
always deliver on time, machines may fail, or staff may be absent through illness. Control is the
process of coping with changes in these variables. It may mean that plans need to be redrawn in
the short term. It may also mean that an ‘intervention’ will need to be made in the operation to
bring it back ‘on track’ – for example, finding a new supplier that can deliver quickly, repairing
the machine which failed, or moving staff from another part of the operation to cover for the
absentees. Control makes the adjustments which allow the operation to achieve the objectives
that the plan has set, even when the assumptions on which the plan was based do not hold true.
Long-range planning: is generally done once a year, focusing on a time horizon that is usually
greater than a year. The length of the time horizon will vary from industry to industry. For those
industries that require many years to plan and construct plants and facilities, and to install
specific process (e.g., refiners), the time horizon will vary may be 5 to 10 or more years. For

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other industries where the ability to expand capacity is shorter (e.g., clothing manufacturing and
many service industries), the time horizon may be 2 to 5 years or less.
Intermediate-range planning: usually covers the period from 6 to 18 months in the future, with
time dimension or “buckets” that are monthly and or quarterly. (The near-term time increments
are often monthly, whereas those that the end of the time horizon tend to be quarterly, as these
are usually less accurate). Intermediate - range planning is typically re-viewed and updated
quarterly.
Short-range planning: covers the period from one day to six months, with the time increment
usually being weekly as with long-range planning, the length of the time horizon for intermediate
and short- range planning will vary from industry to industry.
Aggregate production planning
Again, aggregate production planning is concerned with setting production rates by product
group or other broad categories for the intermediate term (6 to 18 months).
The main purpose of the aggregate plan is to specify that combination of production rate,
workforce level, and the resulting inventory on hand or backlogs that both minimizes costs
(efficiency) and satisfies the forecasted demand (effectiveness). production rate refers to the
quantity of product competed per unit of time (such as VCRs per hour or automobiles per day).
Workforce level is the number of workers needed for production. When the number of units
produced in any given period exceeds demand, the result is an inventory on hand of the product.
When demand exceeds production, the result is a backlog (stock out), which represents the
shortfall. Both inventories and backlogs are carried forward to the next time period, however,
there can be situations when stock outs are not carried forward because the customer decided to
purchase the product elsewhere rather than wait.
Production planning strategies
There are essentially three production strategies. These strategies involve tradeoffs among
workforce size, work hours, inventory and other backlogs. When there is a need to adjust the
workforce on a regular basis, many firms will maintain a nucleus of full-time employees, which
is then increased as required with temporary workers, who are often hired through an
employment agency. Those temporary workers who performed well then hired on a full- time
basis as the need arises.

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 1. Chase strategy: match the production rate to meet the order rate by hiring and laying off
employees as the order rate varies. There are obvious motivational issues with this
strategy. When order backlogs are low, employees may feel compelled to slow down out
of fear of being laid off as soon as existing orders are completed.
2. Stable workforce - variable work hours: vary the output by varying the number of hours
worked through flexible work schedule or overtime. By varying the number of work
hours, production quantities can be matched, within limits, to existing orders. This
strategy provides workforce continuity and avoids many of the emotional and tangible
costs of hiring and firing personnel that are associated with that chase.
3. Level strategy: maintain a stable workforce working at a constant output rate. Shortages
and surplus are absorbed by fluctuating inventory level, order backlogs, and lost sales.
Employees benefit from stable work hours, but inventory costs are increased. Another
concern is the possibility of inventoried products becoming obsolete.
Scheduling and sequencing jobs
Scheduling is establishing the timing of the use of equipment, facilities and human activities in
an organization. Is a time table for performing activities, utilizing reassure or allocate facilities.
Scheduling occurs in any organization regardless of the nature of its activities.
E.g. -. manufacturing schedule production, educational institution schedule classroom,
instruction students and service provider scheduled appointments.
Effective scheduling can yield
 Cost savings
 Increases in productivity
 Jobs completed on time
 Company competitive advantage in terms of customer service.
 In educational institution effective scheduling reduce the need for expansion
 In hospital effective scheduling can save life& improve patient care.
Goals of scheduling
 Efficient utilization of staff, equipment and facilities
 Minimization of customer waiting time, inventories and processing time
Sequencing

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  Sequencing is determining the order in which jobs at a work center will be
processed.
 It is concerned with determining job processing order.
 Sequencing determines both the order in which jobs are processed at various work
centers and the order in which jobs are processed at individual workstations
within the work centers.
 If relatively lengthy jobs are involved, the order of processing can be very
important in terms of costs associated with jobs waiting for processing and in
terms of idle time at the work centers.
 In using this rules, job processing times and due dates are important pieces of
information. Job time usually includes setup and processing times.
Assumptions of priority rules:
 The set of jobs is known;
 no new jobs arrive after processing begins
 No jobs canceled.
 Setup time is independent of processing sequence
 There will be no interruption in processing such as machine breakdowns, accidents, or
worker illness.
 Job flow time: this is the length of time that a job is at a particular workstation or work
center.
It includes; Actual processing time, Any time waiting to be processed, Transportation times
between operations, Any waiting time related to equipment breakdowns, Unavailable parts, and
Quality problems and son on.
 Job flow time is the length of time that begins when a job arrives at the shop,
workstation, or work center, and ends when it leaves the shop, workstation, or work
center,
 The average flow time for a group of jobs is equal to the total flow time for the jobs
divided by the number of jobs.
 Job lateness (job tardiness): this is the length of time the job completion date is
expected to exceed the date that the job was due or promised to a customer.
 It is the difference between the actual completion time and the due date.

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Average number of jobs: jobs that are in a shop are considered to be work-in-process
inventory. The average work-in-process for a group of jobs can be computed using the
following formula. Average number of jobs = total flow time/make span.
Priority rules for allocating Jobs to machines
The process of determine which job is started first on a particular machines or work center is
known as sequencing or priority sequencing. Priority rules are the criteria by which the
sequence of jobs is determined.
These can be very simple, requiring only those jobs be sequenced according to one piece of
data, such as processing time, due date, or order of arrivals. Ten of the more common priority
rules for sequencing jobs are.
1. FCFS: first come, first served. Orders are run in the order that they arrive in the
department.
2. SPT- shortest processing time. Run the jobs with the shortest completion time first, next
shortest second, and so on. This is identical to SOT- shortest operating time.
3. Due date- earliest due date first. Run the job with the earliest due date first.
Prioritizing by due date means that work is sequenced according to when it is ‘due’ for
delivery, irrespective of the size of each job or the importance of each customer. For
example, a support service in an office block, such as a reprographic unit, will often ask
when photocopies are required, and then sequence the work according to that due date. Due
date sequencing usually improves the delivery reliability of an operation and improves
average delivery speed. However, it may not provide optimal productivity, as a more
efficient sequencing of work may reduce total costs. However, it can be flexible when new,
urgent work arrives at the work center.
4. Start date- due date minus normal lead time. Run the job with earliest start date first.
5. STR-slack time remaining; this is calculated as the difference between the time
remaining before the due date minus the processing time remaining. Orders with the
shortest STR are run first.
6. STR/OP- slack time remaining per operation. Order with shortest STR/OP are run first,
calculated as follows
STR/OP = time remaining before due date – remaining processing time
Number of remaining operations

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 7. CR critical ratio: this is calculated as the difference between the due date and the current
date divided by the work remaining. Order with the smallest CR is run first.
8. QR queue ratio: this is calculated as the slack time remaining in the schedule divided by
the planned remaining queue time. Orders with the smallest QR are first.
9. LCFS, last come, first served: this is rule occurs frequently by default. As orders arrive,
they are placed on the top of the slack and the operator usually picks up the order on top
to run first.
10. Random order-whim: the supervisor or the operator usually select whichever job they feel
like running.
Scheduling in jobs on one machine
Consider the following examples: Ioannis Kyriakides is the supervisor of legal copy express,
which provides copy services for L.A. law firms in the down town Los Angeles area. Five
customers submitted their order at the beginning of the week. Specific scheduling data on these
orders are as follows.
Job (in order of arrival) Processing time(days) Due date(days)
A 3 5
B 4 6
C 2 7
D 6 9
E 1 2

1. FCFS rule
Job Processing time (in Due date (in Flow time (in days)
day) days) Start job time finish
A 3 5 0 + 3 = 3
B 4 6 3 +4 = 7
C 2 7 7 +2 = 9
D 6 9 9 +6 = 15
E 1 2 15 +1 = 16

Total flow time = 3+ 7+ 9 + 15 + 16 = 50 days

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 Mean flow time = 50/5 = 10 days
Comparing the due date of each job with its flow time, we observe that only Job A will be on
time. Job B, C, D and E will be late by 1, 2, 6 and 14 days, respectively. On the average a job
will be late by (0 + 1 + 2 + 6 + 14)/5 = 4.6 days.
2. SPT rules
Job Processing time Due date Flow time
E 1 2 0+1=1
C 2 7 1+2=3
A 3 5 3+3=6
B 4 6 6 + 4 = 10
D 6 9 10 + 6 = 16
Total flow time = 1+3+6+10+16= 36 days
Mean flow time + 36/5 = 7.2 days
SPT results in lower average flow time. In addition, Job E and C will be ready before the due
date and Job A is late by only one day. On the average a job will be late by (0+0+1+4+7)/5 = 2.4
days
3. Due date rules
Job Processing time Due date Flow time
E 1 2 0+1=1
A 3 5 1 +3=4
B 4 6 4+4=8
C 2 7 8+2=10
D 6 9 10+6=16

Total completion time= 1+4+8+10+16= 39 days

Men flow time= 7.8 days
In this case jobs B, C and D will be late. On average a job will be late by (0+0+2+3+7)/5=2.4
days.
4. LCFS rules
Job Processing time Due date Flow time
E 1 2 0+1=1

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 D 6 9 1+6=7
C 2 7 7+2=9
B 4 6 9+4=13
A 3 5 13+3=16
Total flow time = 46 days
Mean flow time= 9.2 days average day late=4 day
5. Random schedule
Job Processing time Due date Flow time
D 6 9 0+6=6
C 2 7 6+2=8
A 3 5 8+3=11
E 1 2 11+1=12
B 4 6 12+4=16
Total flow time = 53 days
Mean flow time = 10.6 days Average day late 5.4 days
6. STR schedule
Job Processing time Due date Flow time
E 1 2 0+1=1
A 3 5 1+3=4
B 4 6 4+4=8
D 6 9 8+6=14
C 2 7 14+2=16
Total flow time = 43 days
Mean flow time = 8.6 days Average day late = 3.2 days.
Scheduling n jobs on two machines
Johnson rule consist of the following steps
1. List the operation time for each job on both machines
2. Select the job with the shortest operation time
3. If the shortest time is for the first machines, do that job first, if the shortest time is for the
second machines do the job last.
4. Repeat step 2 and 3 for each remaining job until the schedule is complete.

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 Example: we can illustrate the application of Johnson rule by scheduling four jobs
through two machines.
Step1. List operation time
Job Operation time machine 1 Operation time machine 2
A 3 2
B 6 8
C 5 6
D 7 4

Step 2 and 3: select shortest operation time and assign.

Job A is shortest on machine 2 and is assigned first and performed last. (Job A is now no
longer available to be scheduled).
4. Repeat step 2 and 3 until completion of schedule
Select the shortest operation time among the remaining jobs. Job D is second shortest on
machine 2, thus it is performed second to last (remember job A is last). Now job A and D are not
available any more for scheduling. Job C is the shortest on machine 1 among the remaining jobs.
Job C is performed first. Now, only job B is left with the shortest operation time on machine 1.
Thus, according to step 3, it is performed first among the remaining 0r second overall (job C was
already scheduled first).
In summary, the solution sequence is C B D A