Aggregate planning can be defined as the process involving the development, analyzation and the maintenance of a preliminary and approximate schedule of the overall operations that take place or have to take place in an organization.

Objectives of the Aggregate planning
1. To minimize the investments in the various inventories.
2. To minimize the total cost over the planning horizon.
3. To maximize the customer service.
4. To minimize the changes in the workforce levels.
5. To minimize the changes in the production rates.
6. To maximize the utilization of the plant and the various equipments.

Aggregate planning strategies
1. Active strategy –
• Tries to control the fluctuations, which are in the demand by focusing on the demand management.
• Use the pricing strategies.
• Make use of the methods like the advertising and the promotion.
• Do not meet demand.
• Develop counter – cyclical products.
• Request the customers to back order or advance order.
2. Passive strategy –
• Also called as the reactive strategy.
• Tries to control the fluctuations in demand by focusing on the supply and capacity management.
• Vary size work force by hiring or lay – offs.
• Vary utilization of the labour and also of the equipment through the overtime or the idle time.
• Build or draw from the inventory.
• Sub – contract production.
• Negotiate co – operative arrangements with the other firms.
• Allow the back – logs, back orders and/or stock outs.
3. Mixed strategy –
• Joins or combines the elements of both of the active strategy as well as the passive or the reactive strategy.
• Firms will usually use some combination of the two.