The document outlines the production planning hierarchy in manufacturing organizations, categorizing planning activities into strategic, tactical, and operational levels. Strategic planning is long-range and handled by top management, while tactical planning is medium-range for middle management, and operational planning is short-range executed by lower management. Each planning level imposes constraints on the subsequent level, culminating in master production schedules that drive production planning and control systems.

1. PRODUCTION PLANNING HIERARCHY
Assistant Professor Dr. Mahmoud Abbas Mahmoud
Industrial Engineering Branch
Department of Production Engineering and Metallurgy
University of Technology
Baghdad - Iraq
dr.mahmoudalnaimi@uotechnology.edu.iq
dr.mahmoudalnaimi@yahoo.com
2015 - 2016

2. 6201-5201Production Planning and Control Dr. Mahmoud Abbas Mahmoud
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4- PRODUCTION PLANNING HIERARCHY
Typically, the manufacturing organizations have three categories of
managerial planning activities whose names "strategic", "tactical", and
"operational" production planning. Strategic planning is clearly of "long-
range" scope planning decisions. It is a responsibility of top management
so it is called "business planning". Tactical planning is a "medium-
range" activity involving middle managements. Finally operational
planning, which involves "short-range" actions, and it is normally
executed by lower levels of management (factory operations managers).
Long-range (business plans) are necessary to develop facilities and
equipment, major suppliers, and production processes and become
constraints on the medium-range plan. Medium-range is "aggregate
plans" concerning with employment, aggregate inventory, utilities,
facility modifications, and material-supply contracts. These aggregate
plans impose constraints on the short-range production plans that follow.
So short-range is "Master Production Schedules" (MPS) for producing
finished goods or end items, which are used to derive production planning
and control systems. These systems develop short-range production
schedules of parts and assemblies, schedules of purchased materials,
shop-floor schedules, and workforce schedules. Figure (1) gives an
illustration of the planning activities.

3. 6201-5201Production Planning and Control Dr. Mahmoud Abbas Mahmoud
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Figure (1) Production Planning Hierarchy
Business Planning
Aggregate
Production
Planning
Master Production
Scheduling
Production
Planning and
Control Systems
Planning Horizon
Description
Long-Range
(1-5 Years Horizon)
Medium-Range
(3-12 Months Horizon)
Short-Range
(1-90 Days Horizon)
Top management make long-range plans
for (1)facilitates- plant locations, layouts,
size, and capacities; (2) major supplier
plans and amount of vertical
integrations; (3) processing plans- new
production technology, new production
processes, new system of automations.
Factory operations managers make
plans for (1) production schedules of
parts and assemblies to be
manufactured; (2) schedules of
purchased materials; (3) shop floor
schedules–machine changeovers,
batch movements; (4) workforce
Middle management make plans for (1)
employment–layoffs, hiring, recalls,
vacations, overtime, part-time
employees; (2) inventories; (3) utilities;
(4) facility modifications; (5) material-
supply contractors.
Phase I
Phase II