1. Aggregate planning is intermediate range planning of general levels of employment and output to balance supply and demand.

2. The term "aggregate" implies that planning is done for groups of products, or product types (i.e., product "families") rather than for specific or individual products.

3. Planners take into account projected demand, capacity, and costs of various options in devising an aggregate plan.

4. Among the variables available to planners are adjustments in output rate, employment level, overtime/undertime, and subcontracting.

5. The goal of aggregate planning is to achieve output objectives at the lowest possible cost.

6. Due to the nature of aggregate planning, it is seldom possible to structure a plan that is guaranteed optimal. Instead, planners usually resort to trial-and-error methods to achieve an acceptable plan.

7. Among the strategies aggregate planners might try are to:

1. maintain a level work force and meet demand variations in some other manner.
2. maintain a steady rate of output, and use some combination of inventories and subcontracting to meet demand variations.
3. match demand period by period with some combination of work force variations, subcontracting, and inventories.
4. use a combination of decision variables.

   Note: It is unlikely that planners would attempt to match demand period by period by varying employment levels alone because that would tend to be costly, disruptive, and result in low employee morale.

8. Choosing a strategy usually depends on the cost entailed and company policy.

9. In order to effectively plan, in addition to knowledge of company policy, estimates of the following items must be available to planners:

1. Demand for each period
2. Capacity for each period
3. Costs (regular time, overtime, subcontracting, backorders, etc.)

10. In order to translate an aggregate plan into meaningful terms for production, it must be disaggregated (i.e., broken down into specific product requirements) to determine labor, material, and inventory requirements.

11. A master schedule indicates the desired quantity and timing of deliveries. A master production schedule takes into account planned production, as well as on-hand inventory.

12. There are three basic inputs to the master schedule: Beginning inventory, forecasts for each period in the schedule, and customer orders. Outputs of the scheduling process include projected inventory, production requirements, and the amount of uncommitted inventory, which is referred to as available-to-promise (ATP) inventory.