OM yeild management

7/29/2019 OM yeild management

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By group 1:

-AHMAREEN-LAVAKUMAR-MANIKANTA-SHRAVAN-ZEBA


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Medium-term capacity planning over a two toeighteen month planning horizon.

It involves determining the lowest-cost

method of providing the adjustable capacity for meeting production requirements.

Aggregate production planning.?


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Slide 11.3

Aggregation refers to the idea offocusing on overall capacity, rather than individual products or services.

Aggregation is done according to:ProductsLabor

Time


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Different from manufacturing???

Services do not involve stockpiles or inventory

Service-focused businesses do not have theluxury of building up their inventories duringperiods of low demandIn aggregate planning, services are consideredperishable, where any capacity that is unused isconsidered to be wasted

For ex: Hotel room or an empty flight seat


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Aggregate planning was developed to tackle the problem ofmeeting forecasted demand by adjusting productioncapacity.Aggregate planning has its advantages and disadvantages.It can be used across a wide range of industries, it develops aroad map to operate efficiently.It is used for all production-planning processes, and is alsoflexible.

Why?


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Aggregate planning seeks to forecast mid-term (six to 18months) demand and output capacity for a companyIf your small business is a service company, you may not beused to thinking in terms of output. You don't have to monitor inventory levels, and your employees don't produce a product.However, you can still develop an aggregate plan to best utilizeemployee hours and maintain quality service for your customersthrough times of rising and falling demand. Learn aboutannualized hours and productivity planning, otherwise known asaggregate planning for service businesses

Why??


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Slide 11.7

Production Planning

Long Range Planning

Strategic planning (1-5 years)Medium Range Planning

Employment, output, and inventory levels (2-18 months)Short Range Planning

Job scheduling, machine loading, and job sequencing (0-2months)


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Slide 11.8

Common objectives of productionplanning...

MINIMIZE:Cost, inventory levels, changes in workforce levels, use of overtime, use ofsubcontracting, changes in production ratesand plant/personnel idle time

MAXIMIZE:P rofits, customer service


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Yield management

The application of pricing strategy to allocate capacityamong various categories of demandYield management is the process of understanding,anticipating and influencing consumer behavior in order tomaximize yield or profits from a fixed, perishable resource

(such as airline seats ,hotel room reservations or advertising inventory)


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So what does that definition actuallymean?

Selling the right product

Correct brand, room type, and/or meeting spaceTo the right customer

Transient or Group/Business or Pleasure

At the right time The booking window of how far out guests book

For the right price Properly position rates for each segment


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Documents

OM yeild management