The document outlines the production planning and control hierarchy which includes strategic and business planning, demand management, sales and operations planning, master production scheduling, material requirements planning, capacity requirements planning, and shop floor control. It then defines production/manufacturing as the process of converting raw materials into finished products. Planning involves looking ahead and setting actions to achieve objectives, while control compares actual performance to plans. Production planning and control aims to effectively utilize resources to satisfy customer demand and create profits.

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Production Planning and Control HierarchyProduction Planning and Control Hierarchy
Strategic and Business Planning
Demand
Management
Sales and Operations Planning
(S&OP)
Master Production Scheduling
(MPS)
Material Requirements Planning
(MRP I)
Capacity Requirements Planning (CRP) Vendor Requirements Planning (VRP)
Realistic?
Make Buy
Shop Floor Control (SFC) Purchase Planning and Control
Yes Yes
No No
• Rough Cut Capacity
Planning
• Vendor/Material
Limitations
• Management Decisions
Realistic?
Supply Chain Management
Just in Time
Push and Pull Mfg

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Production/Manufacturing/OperationProduction/Manufacturing/Operation
Definition:
Production/manufacturing/Operation/IE** is
the process of converting raw materials or semi-
finished products into finished products that
have valuevalue in the market place.
This process involves the inputs of resourcesinputs of resources
such as labour, equipment, material, information,
capital or energy, while the outputsoutputs are finished
products, scrap or waste.

4. 4

5. 5
Production
System
Raw materials
Capital/Energy
Labour
Equipment
Information
Finished
products
Scrap
Waste
OutputsInputs
Inputs and OutputsInputs and Outputs

6. 6
Planning and ControlPlanning and Control
Definition:
Planning is the act of looking aheadahead and setting
a set of actionsactions to achieve an objectiveobjective.
Production Planning is about matchingmatching needed
production to available resources.
Control involves making events conform toconform to
planplan, i.e., compare actual vs. planned

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Production Planning and ControlProduction Planning and Control
Definition:
Production Planning and Control (PPC) is the
set of functions concerned with the effective
utilization of limited resources and the
management of material flow through these
resources, so as to satisfy customer demands
and create profits.

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Modes of ProductionModes of Production
1. Primary industries (extraction)
Extraction of materials from their natural source
e.g. Agriculture, hunting, fishing, mining, forestry
2. Secondary industries (construction,
manufacturing, public utility)
e.g. Refinement, conversion, fabrication, assembly
3. Tertiary industries (services)
e.g. transportation, sales, trade, distribution, government, education, health, retailing,
catering

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10. 10

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Total Employment by SectorTotal Employment by Sector

12. 12
Total Employment by IndustryTotal Employment by Industry

13. 13

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15. 15

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Production Planning & Control DecisionsProduction Planning & Control Decisions
• What should be produced, how much, and when
(forecasting/demand management, aggregate
planning/sales & operations planning, master
production scheduling)?
• How much can we produce (capacity
requirements planning)?
• How much do we have and how much do we
need (inventory management / material
requirement planning / just in time)?
• When should we produce (scheduling/shop floor
control)?