Production Planning I Prepared by Faramarz Khosravi

IENG/Mane 332 lecture notes

Reference: PRODUCTION, Planning, Control, and Integration by SIPPER &
BULFIN

Chapter 1: THE PRODUCTION PARADIGM

INTRODUCTION
Production systems are prominent in modern society. These systems form the base for
building and improving the economic strength and validity of a country. The task of
development and running production systems has become progressively complex. Major
changes in produts, processes, management technologies, concepts and culture result in
increasing challenges and demands. This chapter identifies and highlights some critical issues
related to production systems. We start with a discussion of global production.

1 Global production
spurred by renaissance in 1600s and continued with Britain’s initiation of the first industrial
revolution, Europe was the the center of economic power in the nineteenth century; the United
States, however, became the focus of the second industrial revolution, dominating twentieth
century industry. Consequently, management theory and early techniques were the products
of western developments. The concepts of the factory production line, division of labor, and
functional management structure all matured in Europe and America. The post-world war II
emergence of export-oriented southeast Asia, particularly Japan, as a new industrial power
has resulted in an open trading system in which we can no longer ignore international
competition. The emergence of this global marketplace is the subject of this first section. We
first present the evolution of production systems, followed by a discussion of the new
competitive environment.

1.1 Evolution of production systems:

We discuss two aspects of the evolution of production systems; its history and the
management theories it created.

1.1.1 History:
Four major types of production system have evolved historically: ancient, feodal, European,
and American.

We can trace the begining of Ancient systems to 5000 B.C when sumerian prisets started to
records of inventories, loans, and tax transactions. Around 4000 B.C Egyptians were using
the basic management concepts of planning, organizing, and control in their large projects
such as the pyramids and similar structures. This period of time continued by Hebrews and
Chinese for developing basic concepts on production system such as qualification of workers
and initial steps over time and motion study.
During the middle ages, the Feudal system evolved, in which the emperor, king, or queen had
total power over the country. Nobles were given power over regions in exchange for loyalty
to the ruler. The nobles in turn might delegate lands and authority to lesser lords and so on.
Down to freemen and surfs. The production system in existence at this time are best described
as domestic. Typically, the family members were the owners as well as the workers, and they
did the work at home. Land and labor were the major production factors of the time, which
remained the case until the middle of the fifteenth century.

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The European system started evolving during the Renaissance. Although we normally think
of the renaissance for cultural development, much was happening, particularely in Italy, that
would affect industrialization and production systems. Double entry bookkeeping and cost
accounting were practiced there in the 1300s. After some developments in Italy and England,
in 1776 Adam Smith publicized the division of labor in his book, The Wealth of Nations.
Rather than have one person complete a product, he suggested each be responsible for only
one part of the completed job. By this way he increased the number of pins manufactured per
person from 20 to 48,000 per day. After 50 years, Charles Babbage worked on specialization
of labor that caused increasing market size in all areas.

The beginning of the American system can be traced to the development of the modern lathe
by Maudslay around 1800. The most important aspect of Maudslay’s development was that
now some machines were capable of reproducing themselves, which started the machine tool
industry and had a great impact on later developments in production systems.
Across the Atlantic Ocean in America, other exciting events were happening. Eli Whitney,
invertor of the cotton gin, promoted manufacturing with interchangable parts. Widely
credited as the first to use this idea. Whithney used jigs and fixtures to orient and hold the
parts, which could be made by less-skilled machinists. This system of manufacture –called
American System – was adopted by many factories.The convergence of interchangeable parts ,
specialization of labor, steam power, and machine tools resulted in the emergence of the
American system, which was the precursor of mass production as we know it today.
In 1903 Oldsmobile Motors created a stationary assembly line to produce their cars. The
Assembly line is is the logical outgrowth of specialization of labor and the use of capital to
replace labor.

1.1.2 Management theories

Early management theories evolved in this environment bacause operating system were
needed to meet increased production demands. As in many historical developments a begining
is hard to pinpoint. Many people contributed to the process, but Henry Towne was in the
forefront. In 1886 he delivered a paper to the american siciety of Mechanical Engineers and
claimed that shop management was so important as engineering management.

Fredrick Taylor is often called the father of scientific management. Starting as a common
laborer at Midvale Steel, He held a variety of jobs, working his way through the ranks until he
became chief plant engineer. From his work experience, Taylor knew improvement must start
with the workers. He felt the solution was not to make them work harder but to manage them
better. Management should develope proper work methods, teach them to the workers, and
see that they follow them.
As scientific management gained acceptance in the United States, Henry Fayol developed his
theories in France. He was an engineer and later he became managing director of a large
mining company. He viewed problems from the topdown rather than from the shop floor, as
Taylor did. Fayol beleived a firm had six functions: technical (the actual production),
commercial (buying and selling), financial (getting and allocating money), security
(protection of people and property), accounting (keeping records), and managerial (planning,
organizing, command, coordination, and control).
Academia’s contribution to developing management theory came later. Between 1924 and
1927, production levels of a small group of workers at the Hawthorne works of western
electric were studied. The idea was to change working conditions one at a time and measure
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the workers’ output. They first increased the lighting level, and as xpected, production
increased. The unexpected happened when production still increased as the lighting level was
lowered. The increase continued, even when the available light was only as bright as moon
light. At this light, they judged the problem more complicated than originally and called in
Elton mayo, a Harvaed professor and the first academic to make major contributionsto
production system management. The people discussed previously were all practitioners. Mayo
concluded that logical factors are far less important than social factors in motivating workers.
In essence the attention the workers got made them feel special, and they worked harder. The
lesson is that the human factor is critical in production systems.

2 Production systems:
In the broadest sense a production system is anything that produces something. However, we
will define it more formally to be anything that takes inputs and transforms them into outputs
with inherent value. A good example of a production system is a firm that manufactures
simple pencils. Raw materials such as wood, graphite, and paint are the inputs. The
transformation consists of cutting the woods in sheets, sanding it, grooving the wood, adding
the lead, joining the sheets, cutting the pencil shape, and finally painting the finished pencil.
The pencil is the output. We think of large manufacturing operations as production systems,
but many other examples are quite different. For example your university is a production
system. Freshmen are input, acquisition of knowledge is the transformation, and the output is
an educated person. We can break production systems into two classes: manufacturing and
service. In manufacturing, the inputs and outputs are usually tangible, and the transformations
are often physical. On the other hand, service-oriented production systems may have
intangible inputs/outputs, such as information. Transformation may not be physical, as in
education. Another difference is that manufacturing goods may be made in anticipation of
customer need, which is often not possible for services. Education is a good example of this;
students can not be taught before they enroll. For simplicity, we limit our discussion to for-
profit manufacturing systems.

With production systems, we normally think of the portion we can see, usually the
transformation processes. However, most moderm production systems are like icebergs- the
visible portion is a smll part of the whole system. The study of prosuction systems requires us
to consider many of its components, which include the products, customers, raw materials,
transformation processes, direct and indirect workers, and formal and informal systems that
organize and control the entire process. These components lead to issues and decisions that
must be addressed for the production system to operate properly.
We structure our discussion of production systems around four different components:
production flow, building blocks of the system, technology, and system size.

2.1 The flow process

The backbone of any production system is the manufacturing process, a flow process with two
major components. The physical flow of material can be seen, but information flow is
intangible and more difficult to follow. Both types of flow have always existed; however, in
the past, information flow was of little importance. As mentioned before, the emerging
information technology reshaped production systems, so that information flow is critical.
In figure 1-1 we show a generic model physical flow in production systems. Material flows
from the supplier to the poduction system, to become raw material inventory. It then moves to
the production floor, where the material conversion process takes place. The material moves
through different conversion processes performed at workstations but does not necessarily

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traverse the same route each time. Material on the production floor is called work-in-process
inventory (WIP). From the production floor the material flows to a location where it becomes
finished goods inventory. From there it flows to the customer, sometimes through
intermediaries such as distribution centers or warehouses. Note that this discussion of physical
production system flow includes both the supplier and customer. We elaborate on this concept
in the following chapter.

Production Floor

Raw Finished Customer

Supplier Material Goods
Inventory Inventory

Work-in-process

FIGURE 1-1 Generic Physical flow

Figure 1-2 shows a generic production information system common database services all
functions and activities of the production system, in whatever location. The leading principle
is information integration. The outcome of information flow is seen on terminals throughout
the production system.

Master
Product
Forecasting Production
Structure
Schedule

Customer Shop Floor

Orders Control
DATABASE

Purchasing
Engineering
& Receiving

Cost Quality Inventory

FIGURE 1-2 Generic Production information system

To show the complexity of physical and information flows, we consider a television

manufacturer. A TV is no longer just a TV; customer demands include a variety of sizes,
styles, and features. Sizes range from the two-inch Watchman to 45-inch and larger projection
screens. Styles include portables, table models, and consoles. Different features include
picture-in-picture, cable readiness, sleep timer, a built-in VCR, and CD-ROM interactive
systems. A plant must be able to make a range of the TVs demanded rather than just one

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standard model. The manufacturer must decide when and how many of each TV model to
make. Once this decision is made the company must procure a variety of inputs, which may
be unprocessed raw materials (wood or plastic for the cases) or sophisticated components
made separately (picture tubes). They must order the correct quantity and quality of these
inputs and arrange for timely delivery and proper storage. People, processes, and materials are
coordinated to ensure a quality product completed in a timely, cost-effective manner. Finally,
the finished product is packed and shipped to the customer. Although giving a glimpse of
system complexity, this simplified description ignores other functions of a production system,
such as the choice of technology, maintenance of physical equipment, financial matters,
advertising and marketing, and distribution.

2.2 Building blocks

The goal of production systems is to manufacture and deliver products. The principle activity
in meeting this goal is the manufacturing process, in which the material conversion of
transforming raw material into a product takes place. The manufacturing process can be
viewed as a value-adding process. In each phase the conversion performed (at a cost) adds
value to the raw material. When this value-adding process is complete, the process is ready.to
be competitive the goal is that the material conversion has to meet, concurrently, the
following objectives.
- Quality: the product must have superb quality- equal to or better than its competitors.
- Cost: the cost of the product must be lower than the competition.
- Time: the production must be delivered to the customer on time, every time.
There are interactions among the three objectives, customers accept higher cost for unique
products and low quality for cheap ones.
Although there are many elements that that support the achievement of these objectives, we
discuss two here: the physical and organizational arrangements.

2.2.1 PHYSICAL ARRANGEMENTS:

The material conversion process takes place on the production floor, which is arranged in a
certain way to facilitate conversion. Production volume and production variety determine the
type of arrangement, or layout. Consider, for example, a chair manufacturer/ intuitively, the
manufacturing process to make 50 identical chairs would differ from one to produce 50,000
identical chairs. Also, producing the same number of five different types of chairs would
compound the problem. To meet these varying needs, two fundamentally different types of
physical layout have evolved: the job shop and the flow shop.
A Job shop produces low-volume highly customized products. Job shops usually have
several elements in common. Workers must be skilled enough to make a variety of products.
Similarly, general purpose equipment, which can handle within limits different types of jobs,
is normally used. A swing machine , for example, is general purpose equipment for the
garment industry. The final characteristic of a job shop is that each job follows its own path
or route through the layout.
One typical type of job shop layout of manufacturing equipment is a process layout, in which
similar machines are grouped. For example, in a machine shop (a classic job shop), laths are
located in one area and milling machines in another area, as shown in figure 1-3. We also
show the routing of two different jobs through this layout. Obviously, increasing product
variety causing routing to be more complex. Even though managing a job shop can be a
difficult task, a large portion of American production is done in a job shop setting.

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FIGURE 1-3 Process or functional layout

A flow shop produces a high-volume standardized product. The automobile industry is a good
example of a flow shop. An assembly line maintains the material flow, hundreds of thousands
of a given model of car may be made, and production may last for a year. Workers use special
purpose equipment, need little skill, and are able to do fewer tasks than job shop workers.

Each product in a flow shop follows the same sequence of operations. The manufacturing
sequence or assembly operations required by the product determine the layout. A flow shop
uses a product layout. Equipment is arranged so that the product always follows the same
routing through the layout (figure 1-4). In addition, to the car industry, manufacturers of home
appliances and electronic products use flow shops. Managing a flow shop differs from a job
shop. Rather than daily scheduling, the critical problem is setting up and balancing tasks
along the assembly line to ensure a smooth operation.
Between the extremes of job shops and flow shops is a hybrid of the two, the batch shop.

Product 1
Raw C A B D Finished
Material Goods

Raw C A B C B Finished
Material Goods

Product 2
FIGURE 1-4 Product layout

Sometimes, a single, customized product must be made. This production system is a project
shop; its output is a one-time-only job. This layout is an extreme case of a job shop making a

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highly customized, unique product. A project shop uses a fixed-position layout. The product
(ship, aircraft) stays in one place while the material and equipment are brought to it.

As the project shop is an extreme version of a job shop, the continuous shop is a radical
extension of the flow shop.the continuous shop is characterized by continuous flow, as in
petroleum and chemical industries. Discrete units are not produced, but liquids flowing
through pips are chemically transformed into the final products. Because we deal only with
discrete production, continuous shops receive no further discussion.
The final physical layouts encountered are the modern shops. Modern shops fall into the
class of Integrated Production Systems (IPS), and include three major types: Cellular
Manufacturing Systems (CMS), Flexible Manufacturing Systems (FMS), and Computer
Integrated Manufacturing (CIM). We discuss modern shops in Chapter 2.

2.2.2 ORGANIZATIONAL ARRANGEMENT:

The goal of organizations is to subdivide complex tasks into simpler components by division
of labor. Designing a structure to do so requires addressing two primary issues: how to divide
the labor and how to coordinate the resulting tasks. An industry’s organization impacts its
production system, so we must understand the organizational environment. There are three
major types of organizational structures: functional, divisional, and matrix.
Functional and divisional are classic, though opposite, organizational structures. Functional
structure is built around inputs used to achieve the task of an organization. These inputs are
grouped according to the especially of the functions performed,e/g/, engineering, production,
finance, marketing, human resources, quality, etc. A simplified functional organizational chart
in shown in figure 1-5. A more complex chart breaks each function into its dub-functions.

CEO

Finance Marketing Engineering Quality

Producing Purchasing Human

Resources

FIGURE 1-5 Functional organization

Divisional structure is built around the outputs generated by the organization. The most
common is to structure the organization around its products. However it could be built around
projects, services, programs, clients, specific markets, or geographical locations. Today, a
divisional structure is called the strategic business unit (SBU). İn figure 1-6 we show a
divisional organization by product. Each strategic business unit has separate engineering,
marketing, and control functions. The control function is most important to a strategic
business unit. Other functions such as production or purchasing may or may not be
centralized. Managers in a functional organization have authority commensurate with
responsibility. İn a SBU structure, they tend to have more responsibility than authority. On the
other hand, a SBU organization is more customer oriented, and therefore more popular in
market driven systems.

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FIGURE 1-6 Product divisional organization

Both functional and divisional structures are designed around a single focus of either inputs or
outputs, which maintain a “one person” , “one boss” hierarchy throughout the organization. A
Matrix organization is structures around two or more central design concepts. One person
can have more than boss, leading to ambiguity within the organization. In a matrix
organization, a project or product managers responsible for project completion or for
successful development and sales of the product.The project manager does not directly control
resources and must contract with other functions in the organization to complete project
components. In Figure 1-7 we show a production matrix organization. It illustrate how a two
boss situation arises. An employee of a functional department also is responsible to the project
manager; in effect, the employee has two bosses. Matrix organization are difficult to manage
and are commonly found in research and development (R &D) organization.
CEO
Other Services

Cost Centers
Marketing Engineering Production Purchasing Finance

Product A
Manager
Profit Centers
Other Products

Product B
Manager

Product C
Manager

FIGURE 1-7 Matrix organization

These three organizational types are pure structures. In reality, an organization may be a
hybrid of two or even all three. The dominant pattern of a hybrid can be traced back to one of
the pure models.

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2.3 Technology
In section 1-2 we discussed the emergence of market-driven systems also appeared a new
production paradigm: the so-called high-tech products or industries. İn this section we further
explore this paradigm and its impact on production systems.
Although it is difficult to agree on the definition of a high-tech industry, the continuously
increasing rate of technological advancement is obvious. Just as clear is that this rate of
advancement causes basic changes in products, processes, and managerial techniques. To
incorporate and use these technological advances and center the high-tech domain, industry
must accept two realities:
- These advances are major and involve a shift in capital and complementary skills.
- These advances inherently involve a commitment to continuous change.

Today certain products or industries are organized as high-tech;e.g., aircraft and space
industries, electronics, telecommunications, computers, pharmaceuticals, optics, and
composite materials. Further study requires us to be more specific in our definition.
Researchers identify three criteria used to classify industries as high-tech.
- Research and development expenditures are above a minimum percentage of sales.
- The proportion of scientific and technological personnel to total employment is above
a certain level.
- The product has a certain perceived degree of technological sophistication.
The third criterion is subjective and is the reason for including some industries on our earlier
list. Numbers one and two are more objective and do not depend on the product.

2.4 Size of organization

Organizations differ in size and scope, with these differences having an impact on the
production systems. We examine three aspects of this impact. The physical process, the
management process, and the production management decisions involved.

No matter the size of organizations, the physical process in each production system is
similar in nature. The generic physical flow (Figure 1-1) and the ensuring layouts how much
in common in any size industrial organization. The difference lies in relative complexity.
Small organizations have straight forward material flow, as product volume and variety are
limited. Large organizations, usually with a broader product mix, can have many flow routes
through the production system. Although the physical locations may differ, each specific flow
follows the general the general pattern described previously.
Before, we noted that organizational structures vary. the Management process is different in
large organizations as opposed to that of smaller ones. Each organization has a different
managerial process, even though the physical flows are essentially the same. The major
dissimilarity arises in the information flow and the related decision-making process. In a
functional organization decisions are more centralized but are more decentralized in a
strategic business unit. Because of size, decisions in a small organization are more
centralized.

The production management decisions are another element of interest. In content, these
decisions are virtually the same in any type of organization. Generating a forecast for future
demand, preparing production plans, and purchasing material are generic decisions made in
all size companies. Furthermore, the same types of production management tools are used.

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Again, the difference lies in complexity and scope. For a small organization a forecast or
production plan can be generated by using a PC and simple software. A big organization may
need sophisticated software and hardware for the same activities.
The major difference between small and large industrial organizations is not the nature of the
physical flow, but the information flow and the decision-making processes used.

3 PRODUCTION MANAGEMENT TECHNOLOGIES

By now we realize that production systems are complex and need managing. Production
management technologies have many aspects; behavioral, process technology, quality, and
production planning and control (PPC) are a few. We concentrate on PPC because it is a
significant part of production management technology. We examine the evolution of PPC
technology, define the vast area it represents, introduce the concept of product life cycle, and
discuss appropriate technologies.

3.1 Evolution
Previously, we discussed the contribution of management pioneers such as Taylor and Fayol.
Taylor laid the groundworkfor operations-oriented analysis. Gantt, a contemporary and
associate, added another dimension to taylor’s work by recognizing that a process is a
combination of operations. He developed a rudimentary method of scheduling operations, the
Gantt Chart. These charts are used today and deal with scheduling problems and project
environments.

About the same time, Frank and Lillian Gilbert led a team that further developed the field of
operation analysis. They originated the idea that operations are broken down into independent
components, such as grasp, search, and release. Putting these components together in different
ways create different operations. Their work is a basis for predetermined time standards used
to estimate operation time, important data for a production planning and control.
Shewhart proposed one of the first quantitative approaches to PPC. In the 1920s he developed
an organized theory of statistical quality control as applied to manufacturing operations. His
rationale for dealing with variation was a breakthrough, replacing the deterministic
approaches previously used.

3.2 Production planning and control

Production planning and control technology combine the physical and information flows to
manage the production system. PPC has several distinct elements. In figure 1-8 we
superimpose these elements on the physical flow of a production system.

We position these elements at different places along the physical flow route and interaction
between the elements is not shown. The PPC function integrates material flow using the
information system. Integration is achieved through a common data base (Figure 1-2).

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FIGURE 1-8 Elements of production planning and control

Interaction with the external environment is accomplished by forecasting and purchasing.

Forecasting customer demand starts the production planning and control activity. Purchasing
connects the production system with its inputs provided by the external suppliers. Extending
production planning and control to suppliers and customers is known as supply chain
management.
Some elements are associated with the production floor itself. Long-range capacity planning
guarantees that future capacity will be adequate to meet future demand, and it may include
equipment, people, and even material. This decision is aided by a technique known as
aggregate planning. Production planning transforms the demand forecasts into a master
production plan, which considers overall availability of capacity and material. Detailed
planning generates short-range requirements for material and capacity and performs short-
term production scheduling. Additionally, inventory management maintains and controls raw
material, work in process, and finished goods. Cost estimation and control and quality follow-
up involve all parts of the production system.
Many of these elements relate to avtivities performed by other functions, e.g., the purchasing
department or the production function. PPC does exactly what the name implies; planning and
control of production.

3.3 Product life cycle

A product life cycle describes the evolution of the product as measured by sales over time.
The five stages of a product life cycle are product planning, introduction, growth, maturity,
and decline. Figure 1-9 shows sales in each of these stages.

Product planning is the development stage, in which both product design and production
process are determined. There are no sales during this stage.
Introduction represents a period of low-volume sales. The product is refined, and marketing
efforts are beginning.

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The growth stage has rapid product growth and a fast increase in sales. This period is difficult
for the manufacturing organization, which has to keep up with the increasing sales volume.

At maturity, we see a tapering off in the growth rate as the market becomes saturated.
Demand is stable and may decline slowly. A wise producer in this stage, must think about
designing and planning for the next product.
A drop in product demand is seen in the decline phase. The product has been replaced by new
products. Sales and profits decrease, and at same point, production is halted.

FIGURE 1-9 Product life cycle

Neither life cycles nor the length of the individual stages are the same for all products. For
some products the life cycle may be short- several years for high-tech products or a season for
fashion goods. Other products may be survive for years. By modifying a product, its life cycle
may be extended.

4 DECISIONS IN PRODUCTION SYSTEMS

By now production systems, their evolution, organization, technology, and the tools required
to manage them should be familiar. However, neither management tools for computers run an
organization. Organizations are run by people who make decisions that keep the organization
moving toward its objectives. İn the following section we address decision making in
production systems. We discuss the notion of a planning horizon, present types of decisions,
and introduce the implementation cycle.

4.1 Planning Horizon:

The types of decision in a production system depend on the planning horizon, which is no
different from everyday life. A decision to buy a house has long-term impact and takes a long
time to prepare. On the other hand, deciding what to buy in the grocery store can be
spontaneous , and its implications are short lived. For planning purposes, business and
industry usually identify three types of planning horizons: long, medium, and short.

A Long planning horizon, sometimes called strategic planning, covers a horizon of one to
several years into the future. The decisions made for this horizon are called strategic
decisions. They have a long-range impact on the direction of production systems and should
be consistent with long-term organizational goals.
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A medium planning horizon covers any period from one month to one year and is called
tactical planning. Decisions made for this time frame, known as tactical decisions, are
oriented towards achieving the annual goals set for the production system.
A time frame ranging from days (sometimes hours) to weeks or one month is the short
planning horizon, also known as operational planning. Operational decisions are concerned
with meeting the targets of the monthly production plan. In figure 1-10 we show the three
planning horizons on a time scale.

Tactical planning
Hour Day Week Month Year Years
Operational planning Strategic planning
FIGURE 1-10 Planning horizons

All planning is future oriented, implying that present decision will determine future results.
The three types of horizon planning are often interrelated. There is a hierarchical relationship
among the three; in the sense that each planning phase has to be coordinated with that above
or below.

4.2 Types of decisions:

Even in the middle-sized industrial organization, there are hundreds of decisions made every
day and at all management levels. The production system is part of this decision-making
process, and some foundation is required to understand its decision-making environment. We
identify three criteria for classifying production system decisions: organizational hierarchy,
time, and topic.

Obviously the nature of decisions made by top management is different from those made by
production line managers. Typically, strategic decisions are made by top management, tactical
decisions are made by middle management, and operational decisions are made by operations
managers. A strategic decision might involve capacity expansion. Its derived tactical decision
would be the choice of equipment to increase capacity. How to install the equipment would be
an operational decision.
Classification by time was covered in the discussion of planning horizons. A definite
relationship exists between time and hierarchical classifications. Typical top management
decisions are long term, whereas operational decisions are short term by nature.

Lastly, we include the topical content of different discussions. A decision might deal with
production issues, a financial aspect, quality, or material. Some decisions will relate to more
than one topical area.

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In table 1-1 we illustrate these decisions relative to production planning. As seen in the table
the units used inj defining production decisions may vary along the time/hierarchy axis.

TABLE 1-1 Production planning decisions

Long (strategic) Intermediate (tactical) Short (operational)
Top management Middle management Operational management
Time Three to ten years Six months to three years One week to six months
Dollars; hours; product Indicidual products;
Unit Dollars; hours
line; family product family
Intermediate forecast; Short range forecast;
Aggregate forecast; plant capacity and production capacity and production
Inputs
capacity levels taken from long levels, processes;
range plan inventory levels
Allocation of jobs to
Work force levels;
machines; overtime;
Capacity; product; processes; production rates.
undertime;
Decisions supplier needs; quality Inventory levels; contracts
suncontracting; delivery
policy with suppliers;quality
dates for suppliers;
levels; quality costs
product quality

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