What is aggregate planning?

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herappleness's profile pic

M.P. Ossa | College Teacher | (Level 1) Distinguished Educator

Posted on

Aggregate planning can also be defined as "total planning", as the meaning of the word "aggregate" suggests. It is the process by which a group of people, or a focused group, makes a list of needs and priorities within the sub-groups of an organization. This group then decides what are the goals and procedures for each of the sub-groups in order to accomplish the organizational mission.

Basically, aggregate planning is the systematic planning of the products, services, prices, and production of goods that will be required for supply and demand. If you plan ahead of time, you will have a wider view of what the organization needs in order to always be ready to accommodate to the fluctuations of the economy, and always maintain a decent-enough supply of goods to keep the organization flowing.

In reality, aggregate planning is optimal for just about every field, although the term is mostly associated to the field of business. However, it is safe to argue that most organizations do a similar kind of planning each time committees review the goals, mission, and vision of the organization and then produce a plan of action that goes in accordance to what needs to be accomplished.

shwetasomani's profile pic

shwetasomani | Student, Undergraduate | (Level 1) eNoter

Posted on

Aggregate plan is the total or aggregate plan of acompany for producing a product over a certain period of time, say the coming twelve months. Formulation of an aggregate plan is the starting point for any manufacturing planning and is based on the order expected during the planning period. The plan must be firmed up for a reasonable period of time because overall production volume can not change abruptly without incurring significant unplanned costs.

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