Reading Assignment 2

Abbas Ali Asghar Ali

20181-24756

Production Plan:

The planning of production and manufacturing modules in a firm or industry is known as

production planning. It makes use of resource distribution of personnel activities, materials,
and production capacity to satisfy various clients.

It can aid in the effective manufacture of goods or the establishment of a manufacturing

facility by facilitating the necessary requirements. A production plan is created on a regular
basis for a specified time period, which is referred to as the planning horizon. The following
activities can be included:

• Determining the appropriate product mix and manufacturing load to meet the needs of
customers.

• Aligning the needed level of output with available resources.

• Planning and selecting the actual work to begin in the production facility.

• Setting up manufacturing orders and delivering them to production facilities.In order to

develop production plans, the production planner or production planning department needs to
work closely together with the marketing department and sales department. They can provide
sales forecasts, or a listing of customer orders. The work is usually selected from a variety of
product types which may require different resources and serve different customers.
Therefore, the selection must optimize customer-independent performance measures such as
cycle time and customer-dependent performance measures such as on-time delivery.
A critical factor in production planning is the accurate estimation of the productive capacity
of available resources, yet this is one of the most difficult tasks to perform well. Production
planning should always take into account material availability, resource availability and
knowledge of future demand.
 Master Production Schedule (MPS):

A master production schedule is a plan for each time period's various commodities to be
produced, such as production, staffing, inventories, and so on. It's frequently associated with
manufacturing, as the plan specifies when and how much of each product will be required. This
plan quantifies important processes, pans, and other resources in order to improve production,
identify bottlenecks, and forecast needs and finished items. Because MPS controls so much in
the industry, its accuracy and viability have a big impact on profits. Typical MPS are built by
software and then tweaked by the user.

For organisations to synchronise their operations and become more efficient, a master
production schedule may be required. In the end, an effective MPS will:

• Provide information to production, planning, purchasing, and management so they can plan
and regulate manufacturing.

• Make a link between overall company planning and forecasting and specific activities.

• Allow marketers to make legally binding delivery promises to warehouses and customers.

• Boost the efficie

Sales Forecast:
Sales forecasting can be defined as predictive analytics which tries to understand and predict
customer demand to optimize supply decisions by corporate supply chain and business
management. Sales forecasting methods are divided in two major categories, qualitative and
quantitative methods. Qualitative methods are based on expert opinion and information
gathered from the field, while quantitative methods use data, and especially historical sales
data, as well as statistical techniques from test markets. Demand forecasting may be used in
production planning, inventory management, and at times in assessing future capacity
requirements, or in making decisions on whether to enter a new market.

The main objective of sales forecasting is to paint an accurate picture of expected sales. Sales
teams aim to either hit their expected target or exceed it. When the sales forecast is accurate,
operations go smoothly. When the forecast is exceeded, the company gets to decide how it’ll
invest the extra money. Outside ofjust aiming for accuracy, sales teams hope their forecasts
will achieve two simple objectives:

• Smooth Internal Operations: When the forecast is met, the friction inside the
organization melts away. Trade-offs and compromises don’t need to be made about
things like cutting the workforce, reducing support, or halting product development.
Instead, business hums along nicely.

• Smooth External Operations: Every company wants to delight its customers and
partners. When forecasts are met and internal operations are flowing as they should be,
company can continue funding external marketing events, staffing ample customer
service touchpoints, investing in its community, and more. From the outside, it’s clear
that everything inside is working as it should be.