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PRODUCTION PLANNING

• A good planning system must have balanced capacity and demand. Demand Capacity 2 .

and when they are needed.• Capacity: – The capability of the firm to produce goods and services. how many are needed. – Marketplace establishes the priority. – It depends upon the resources of the company. • Priority: – What products are needed. 3 .

Manufacturing Planning And Control System • Five major levels of MPC system. – Material requirements plan. 4 . – Production Plan – Master production schedule. – Strategic Business Plan. – Purchasing and production activity control.

– Planning horizon. – Planning cycle.• At each level firm look following aspects: – Purpose of the plan. • At each level. three questions must be answered. – What are the priorities – how much of what is produced and when? – What is the available capacity – what resources do we have? 5 – How can differences between priorities and capacity be . – Level of detail – the detail about products required for planning.

Strategic Business Plan Production Plan Master Plan PLANNING Master Production Schedule Material Requirement Plan Production Activity Control IMPLEMENTATION 6 .

Strategic Business Plan • It is the statement of the major goals and objectives the company expects to achieve over the period of 2 to 10 years. markets and so on. • It is usually reviewed every six months to a year. 7 . production and engineering. • Responsibility of senior management to develop this plan. • It is based on long range forecasts and includes participation from marketing. finance. • The level of detail in the strategic business plan is not high. • It includes the product line to be offered.

The Production Plan • 8 .

• The plan will only show major product groups. • The planning horizon is usually 6 to 18 months.• The level of detail is not high. or families. 9 . • Reviewed each month or quarter.

• The production plan is based upon families of product whereas MPS deals with individual end items. • Inputs to the MPS are the production plan. • Plans are reviewed weekly or monthly basis. • It breaks down the production plan to show for each period. Master Production Schedule • MPS deals with individual end items. inventories and existing capacity. • Planning horizon usually 3 to 18 months. 10 . • The level of detail for the MPS is higher than production plan. forecast of individual end items.3. the quantity of each end item to be made.

• The level of detail is high. • The planning horizon is usually from 2 to 18 months. • Plans are reviewed on a weekly basis.4. Material Requirement Plan • MRP is a plan for production and purchase of the components used in making the items. 11 .

Level Production Strategy 12 .1.

Demand Matching Strategy 13 .2.

• Use overtime in peak periods. • Vary capacity through changes in plant and equipment (generally long term option) 14 . • Vary workforce by changing size of workforce through hiring and firings. while holding workforce and facilities constant.MANAGEMENT OPTIONS TO MEET FLUCTUATING DEMAND • Build inventories in slack periods in anticipation of higher demands later in planning horizon. under time in slack periods to vary output. • Carry backorders or lost sales during peak periods.

ThanKS 15 .