Basis of production plan:

On the basis of production plan production schedule are divided into three following categories:

• Long range production schedule
• Medium range production schedule
• Short range production schedule

Long range production schedule are utilized to plant facilities and equipments, major suppliers, and production processes that become constraints on the medium and short range production plans. Medium-range production schedule produced aggregate planning that includes plans of concerning employment, facility modification, aggregate inventory, and material supply contracts. These aggregate plans impose constraints on short production plans. The short range production plans are plans for generating finished goods or end items, which are utilized to drive production planning.

A product included in the master production schedule is divided into three categories :

• Firm Customer Orders
• Forecasted Demand
• Spare Parts

Productions in each of category vary from company to company. Is some of cases one or more categories can be omitted. Companies generally producing assembled products shall have to handle all three types. In the case of specific customer order, the company is usually enforced to deliver the item by a specific due date to the sales department. In the second category, production output quantities are based on statistical forecasting techniques applied to previous demand patterns that are estimated by the sales staff and other sources. For several companies, forecasted demand constitutes the largest portion of the master schedule. The third category consists of repair parts that shall either be stocked in the company's service department or sent directly to the customer. Some of companies exclude this third category for the master schedule since it does not represent end products.

Generally Master production schedule known as medium range plan. It always takes account of lead time, order of raw materials, generates parts in the manufacturing units and assembly of the end products. Depending on the types of product, lead time vary from a day to many months. For a production order, MPS is generally considered to be fixed in the near term that means changes are not permitted for a short period because it is difficult to adjust production schedule within such a short period of time. Though, adjustments are allowed for a long period. In this period, manufacturing units are trying to cope with changing demand pattern or new products are introduced. Hence, aggregate production plan is not only the input that controls the master production schedule but can affect the demand of new customer orders and changes in sale forecast over the near time.