Wilkins- Aggregate Production Planning

Executive Summary

This case explores the inventory and resource management for Wilkins Regulator Company. Currently they have no real plan in place that allows them to track their inventory and control production in an effort to maintain and control that inventory. Because of this they have growing raw materials inventory that is weighing them down as well as a finished unit inventory that is being produced based on sales forecasts and no plan for the actual production I the future. Because they have been charged to get control of, and reduce their inventory, the Wilkins firm is looking at two options for the production planning. First is the Level Production method and second is the Chase Demand strategy. This case analyzes both options with a recommendation as to which would be in the best interests of the Wilkins Company.

Problem Statement

The Wilkins Company has been challenged to lower their inventories by 30% in the next quarter. As they look at the possibilities and the options available to them, they have zeroed in on the revamp and the reworking of their aggregate planning process. By adopting either a Level Production plan or utilizing a Chase Demand method plan they hope to decrease inventory costs while at the same time increasing their ability to provide the same timely service that they currently pride themselves on. By choosing one of these options they are committing to a plan going forward including a possible adjustment in their work force and a complete revamp of their forecasting methods.

Analysis

The aggregate production process contains three main elements, first forecasting, second the actual aggregate planning and finally the analysis of resources and how they fit into their aggregate plan. There are many difficulties associated with this process, the first being the difficulty of forecasting. The second issue that you have is in the actual production planning. There are basically two ways to look at production...