Aggregate Planning with Learning Curve Productivity

Research reports of others indicate that many manufacturing organizations experience (a) the probiem of aggregate planning, and (b) experience systematic productivity changes throughout the “life” of a product. Methods for resolving (a) and for quantifying (b) have been developed and applied independently in the operations management literature. All current aggregate planning models are suitable only for constant productivity situations. The current research integrates (a) and (b) into a single computer-based model which permits the development of aggregate-output plans in the face of changing, productivity. The model requires reformulation of traditional aggregate planning methods to incorporate changes in productivity and thereafter solves the reformulated planning problem using direct-computer search. The potential significance of the model is demonstrated by generating a series of aggregate plans for various learning rates. These plans are then used to develop manpower schedules, for cash flow analysis, and for making product pricing decisions.