Production Planning in Manufacturing
Planning how a product will be financed, produced and distributed are all issues that must be carefully determined before a new project is moved into full-scale production.
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Conceptual Planning
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Production planning may take weeks or months, depending on the type of product and production process. Managers measure risks versus rewards in the manufacturing process to determine the profitability of new products or services.
Financial Planning
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Using a basic "time value of money" formula, managers estimate the amount of cash a product or service will produce in future years and discount it back to today's cash value. This calculation will determine the amount of capital that should be invested in the start-up operation costs for production.
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Product Planning
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This stage of production planning is important because a poor-quality product or unwanted product can be the death knell of the production process.
Production Planning
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Finding the proper production facility, materials suppliers and qualified labor are all important pieces of production planning. Because the production process is where the bulk of the costs occur, properly reviewing and planning for this process is important.
Supply Chain Planning
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Supply-chain planning is how managers move the product into the stores that sell the produced goods. Contracting with delivery and warehouse companies aid manufacturers in being able to quickly turn their products in sales and generate more cash for further production.
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