Production planning and control involves determining the quantity and timing of future production to meet forecasted demand. Production managers try to determine the best way to do this by adjusting production rates, manpower levels, inventory levels, and using overtime work or subcontracting. Good decision making in operations management involves defining the problem, establishing decision criteria and goals, formulating a model relating goals to variables, identifying and evaluating alternatives, and selecting and implementing the best alternative based on logic, data, and qualitative and quantitative analysis. Planning occurs over short, medium, and long terms with short and medium term planning focused on monthly, quarterly, and aggregate production plans and long term planning focused on strategic facility and capacity decisions.

1. Production Planning and Control 12 July 2005 Production Planning is one of the main function of a production Manager. This is concerned with determining the QUANTITY and TIMING of production for the FUTURE. Isn’t it DIFFICULT! Production manager try to determine the BEST way to meet forecasted demands by: Adjusting production rates Adjusting manpower levels Inventory levels Overtime works subcontracting

2. Decision-making in Operations Management Operations managers are decision makers. What makes the difference between a Good Decision and a Bad Decision? “ Good’ decision = logic + Data + Alternatives Steps Define the problem and the factors that influence it Establish decision criteria and goals Formulate a model (relation between goals and variables) Identify and evaluate alternatives Select BEST alternative Implement the decision

3. Problem ? Quantitative Analysis Logic Historical Data Market research Scientific analysis Modeling Qualitative Analysis Emotions Intuition Personal experiences Rumors Decision

4. The Planning Process Planning Short Term Medium Term ( begins once long term capacity decisions are made. Monthly and quarterly plans, AGGREGATE PRODUCTION PLAN – related to operation managers – Tactical Scheduling decisions) Long Term ( Facility Location and expansion, New product development, Research funding, investment over several years, strategic issues – related to Top Management)