This is the aggregate the production plan as it is usually the development of monthly or quarterly production requirements that will meet the estimates of demand. Gross capacity considerations must be taken into account during production planning.
To the extent that there is mismatch between the available capacity and the long term demand forecast, the module needs to examine and decide how to rectify this gap.
Therefore, sales orders have to be met by strategies like using overtime, hiring of extra staff (temporary) or layoff of such persons, carrying inventory or giving a subcontract.
By its nature aggregate production planning lies in a hierarchy of decisions that includes policy directions from above as well as the problem of disaggregating the plan into detail schedule.
Once a production plan is made, it must be desegregated into tome-phased requirements for individual products. This plan is called the master production schedule (MPS). The MPS usually states weekly product requirements over a 6 to 12 month time horizon.
Aggregate production planning
