Production planning under seasonal demand: A case study perspective

Abstract

A small survey has been conducted to establish how companies translate sales forecasts into resources plans when they have to cope with seasonal swings in sales. The results show that industry does not follow the textbook approach, but rather than lament this (apparent) lack of sophistication an attempt is made to explain why. It soon becomes clear that the (theoretical) top-down “Aggregate Planning” formulation is not viable, and also that the minimization of annual production-inventory costs is not necessarily the best strategy to adopt.