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Production PLANNING
Production PLANNING
Production Planning 2
Production Planning
Purpose
Effectively utilize limited resources in the
production of goods so as to satisfy
customer demands and create a profit for
investors.
Forecasting
Aggregate planning
Production Planning 4
Forecasting
Objective: predict demand for
planning purposes.
Laws of Forecasting:
◼ 1. Forecasts are always wrong!
◼ 2. Forecasts always change!
◼ 3. The further into the future, the
less reliable the forecast will be!
Production Planning 5
Aggregate Planning
• Objective: generate a long-term
production plan that establishes a
rough product mix, anticipates
bottlenecks, and is consistent with
capacity and workforce plans.
Production Planning 6
Production Planning 7
Material Requirement Planning
Objective: Determine all purchase
and production components needed
to satisfy the aggregate/disaggregate
plan.
Issues:
◼ Bill of Materials: Determines
components, quantities and lead times.
◼ Inventory Management: Must be
coordinated with inventory.
Production Planning 8
Sequencing and Scheduling
Objective: develop a plan to guide the
release of work into the system and
coordination with needed resources (e.g.,
machines, staffing, materials).
Methods:
◼ Sequencing:
Gives order of releases but not times.
◼ Scheduling:
Gives detailed release times.
Production Planning 9
CAPACITY PLANNING
Production Planning 10
The Capacity Planning Decision Hierarchy
Production Planning 11
WHAT IS PRODUCTION PLAN?
Production Planning 12
Why is it important to have a
carefully developed production plan?
Production Planning 13
A carefully developed production plan will
allow your company to meet the following
objectives :
Production Planning 14
A carefully developed production plan will
allow your company to meet the following
objectives :
Production Planning 15
Production Planning 16