PRODUCTION PLANNING AND CONTROL-Unit 3
- 2. PRODUCT PLANNING • Product Planning is the ongoing process of identifying and articulating market requirements that define a product’s feature set. • Product planning serves as the basis for decisions about price, distribution and promotion.
- 5. VALUE ANALYSIS • Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost
- 6. LACK OF PRODUCT PLANNING • Unsatisfied customer • Durability deteriaration • Lack of quality • Loss of brand name., Etc
- 8. PROCESS PLANNING – INPUT INFO. • PRODUCT • PROCESS • CAPACITY • ORDERS • DUE DATES • RESOURCES • ETC.,
- 9. STEPS IN PROCESS PLANNING • Analyzing environment • Establishing objectives or goals • Seeking necessary Information
- 10. QUANTITY DETERMINATION – BATCH PRODUCTION • Economic batch quantity (EBQ), also called "optimal batch quantity" or economic production quantity, is a measure used to determine the quantity of units that can be produced at minimum average costs in a given batch or production run. • Economic Production Quantity model (also known as the EPQ model) is an extension of the Economic Order Quantity model. The Economic Batch Quantity model, or production lot-size model, is similar to the EOQ model in that an optimum is to be calculated for the batch quantity to be produced.
- 11. EBQ In working with this EBQ model, principal assumptions are: • The demand (D) is known and constant within a certain period of time • The unit cost of the inventory item (U) is constant • The annual holding-cost per unit (Ch) is constant • The setup-cost per batch (C) is constant • The production time (tp) is known and constant • there is one kind of product • There is no interaction with other products • The aspect of time does not play a role, just the setup time does • The setup cost is constant and does not act upon the batch quantity. Variables • K = setup cost • D = demand rate • F = holding cost • T = cycle length • P = production rate Formula: Sqrt(2x annual demandx setup costs)/(inventory carrying cost per unit)