number of workers, and so on.

The production plan is management's authorization for the master scheduler to convert it into a more detailed plan, that is, the master production schedule. See: sales and operations planning, sales plan.

A process to develop tactical plans based on setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, and so on, as expressed in the overall business plan. The sales and production capabilities are compared, and a business strategy that includes a sales plan, a production plan, budgets, pro forma financial statements, and supporting plans for materials and workforce requirements, and so on, is developed. One of its primary purposes is to establish production rates that will achieve management's objective of satisfying customer demand by maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable. Because this plan affects many company functions, it is normally prepared with information from marketing and coordinated with the functions of manufacturing, sales, engineering, finance, materials, and so on. See: aggregate planning, production plan, sales and operations planning, sales plan.

An element of manufacturing strategy that includes the design and development of manufacturing planning and control systems in relation to the following considerations: (1) market-related criteria-the required level of delivery speed and reliability in a given market segment, (2) process requirement criteria-consistency between process type (job shop, repetitive, continuous, etc.) and the production planning and control system, (3) organization control levels-systems capable of providing long-term planning and short-term control capabilities for strategic and operational considerations by management. Production planning and control strategies help firms develop systems that enable them to exploit market opportunities while satisfying manufacturing process requirements.

The approach taken in setting the overall manufacturing output to meet customer demand by setting production levels, inventory levels, and backlog. Companies can use a chase, level, or hybrid production planning method. See: chase production method, hybrid production method, level production method.