Aggregate planning for seasonal demand: reconciling theory with practice

Purpose – The paper reports on the ramifications for production planning when monthly sales exhibit predictable seasonal highs and lows. The literature first acknowledged and dealt with the (aggregate planning) problem 50 years ago. Nevertheless, there is neither evidence that industry has adopted any of the mathematical techniques that were subsequently developed, nor a convincing explanation as to why not. Hence this research sets out to discover the methods manufacturers use to cope with seasonal demand, and how germane the published algorithms really are.Design/methodology/approach – Forty‐two case studies were compiled by interviewing senior managers and then conducting plant tours. No prior assumptions were made and the list of questions covered the gamut of production planning.Findings – The main finding is that manufacturers select a straightforward production strategy, right from the outset, so the fundamental cost‐balancing format is not relevant. The majority pick a “chase” strategy, since most...