A definition of the term ‘planning’ leads to a group of related terms such as ‘strategic planning’, ‘design planning’, ‘master planning’, ‘operative planning’ and ‘production planning.’
The goal of the production planning system is to maximize profits. There is cost per unit to manufacture and a selling price per unit that has been pre-negotiated.
Production planning can be defined as the planning of the acquisition of the resources and raw materials, as well as the planning of the production activities, required to transform raw materials into finished products meeting customer demand in the most efficient or economical way.
Production planning may be viewed as providing a bridge between production and marketing/sales.
In many organizations, production planning is part of a hierarchical planning, resource allocation, scheduling and control framework.
The production plan considers resource capacities, time periods, supply and demand within a reasonably long planning horizon at a high level and is the input to more detail, shorter-term functions at the lower level, such as scheduling and control, which usually have more accurate estimates of supply demand, and capacity levels.
What is production planning?
Lager Beer Brewing Process
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Lager beer, a globally celebrated beverage, owes its distinct
characteristics to a meticulous brewing process that sets it apart from
other beer styles. Th...
