Production Planning may be said to be a

technique of forecasting ahead every step in

the long process of production, taking them at
right time and in the right degree and trying to
complete operations at the maximum efficiency
 Inputs like materials, men and machines are
efficiently used
 Factors of production are integrated to use them
economically
 Division of work is undertaken carefully so that
every available element is properly utilised
 Work is regulated from the first stage of
procuring raw materials to the stage of finished
goods
 Questions like what, when and how to be
manufactured are decided
 Determining sequence of operations for
continuous production
 Planning plant capacity for future production
programmes
 Issuing co-ordinated work schedules to
concerned persons
 Maintaining sufficient inventories to support
continuous flow of production
 Evaluating performance of workshops
 Maintaining production schedules to ensure
delivery at proper time
 Production planning is important for the
following reasons -
 For Increasing Production – Main purpose of
production planning is to arrange inputs. It
helps in raising industrial output.
 For co-ordinating plant activity -In
planning production is carried out in a number
of processes and thus activities are
synchronized for smooth working.
 Following are the limitations faced by production
planning–
 Based on Assumptions – In case the assumptions
prove correct, the planning and control will go
smoothly. But if they go wrong, procol will go weak.

 Rigidity – Under production planning, there is

rigidity in the behaviour of employees and it may
not help in smoothening flow of work.
 Difficult for small firms – This process is time
consuming and therefore not affordable for small
firms

 Costly – It is a costly device as its

implementation requires separate persons to
perform functions of planning, expediting,
dispatching etc.

 Dependence on External Factors – External

factors like natural calamities, change in
technology, government controls etc reduce
effectiveness of production planning.
 Planning
 Routing
 Scheduling
 Despatching
 Follow-up and Expediting
 Inspection
It is the first element of production planning
and control. Planning is deciding in advance
what is to be done in future. An
organisational set up is created to prepare
plans and policies. Various charts, manuals
and production budgets are also prepared.
Planning provides a sound base for control. A
separate department is set up for this work.
Routing is determining the exact path which will
be followed in production. It is the selection of
the path from where each unit have to pass
before reaching the final stage. The stages
from which goods are to pass are decided in this
process.
Scheduling is the determining of time and date
when each operation is to be commenced or
completed. The time and date of manufacturing
each component is fixed in such a way that
assembling for final product is not delayed in
any way.
Despatching refers to the process of actually
ordering the work to be done. It involves
putting the plan into effect by issuing orders. It
is concerned with starting the process and
operation on the basis of route sheets and
schedule charts.
“Follow up or expediting is that branch of
production control procedure which regulates
the progress of materials and part through
the production process.”
Inspection is the process of ensuring whether
the products manufactured are of requisite
quality or not.
Inspection is undertaken both of products and
inputs. It is carried on at various levels of
production process so that pre-determined
standards of quality are achieved.
Inspection ensures the maintenance of pre-
determined quality of products.
 A firm can manufacture two products A
& B relevant financial and resource
requirment details are as follows.
A(x) B(y)
Material(Kg/unit) 4 1
Labour(Kg/unit) 2 3
Unit variable 18 11
cost(Rs)
Selling 24 16
Price(Rs/Unit)
Maximum(Sales/ 180 250
Unit)
 The daily supply of material Is ltd to 800
Kgs and Labour hrs are Ltd to 900. The
firm wish to set production level so as to
maximise the total profit.
 Formulate LPP and Solve by graphical
method.
THANK YOU