Unplanned Events
Aggregate plans are continuously updated to accommodate the effects of unplanned events. Forecasted demand and actual demand for a product may differ significantly due to unexpected events. Not achieving planned output for the month or the workforce not being able to produce at its average capacity are unexpected events that may also disrupt the plans. These unexpected events must be taken into account while developing aggregate plan. But in this case, the difference will be that actual demand is taken as input rather than the forecasted demand. As the aggregate plans are updated, the master production schedule is also altered to incorporate these changes. But, sometimes the aggregate plan remains fixed, while the master production schedule undergoes changes because of changes in demand for individual products, the production process, and performance rates. The MPS transactions, records and reports are updated and reviewed continuously to accommodate these changes. This process of reviewing and updating, called "rolling through time," shows the dynamic nature of planning and scheduling activities in operations management.
Behavioral Considerations
Behavioral considerations are important in planning and implementing the aggregate plans. Deciding the time horizon is the biggest issue in aggregate planning, as the complexities in planning are dependent on the time horizon. If the plan is short-term and based on judgment and experience, it might turn out to be costly. But long-term planning is a difficult task. Therefore, the optimal time period for aggregate planning should be selected.
When an aggregate plan is implemented, it has an impact on almost all the functions and departments of an organization. For example, the purchasing department has to make arrangements to procure materials. Subcontractors need to be hired. The implementation of the aggregate plan initiates actions in various functions. It also affects organizational environment. If the plan specifies reduced output, people may be removed from their jobs. This may affect their level of motivation and job satisfaction.
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