Budgets:

Budgets to receive funding, operations manager are generally required to submit annual and sometimes quarterly budget requests. Aggregate planning activities are key to the success of budgeting process. Recall that the goal of the aggregate planning is to minimize the overall production-related costs over the planning horizon by determining the optimal combination of workforce levels and inventory levels. Thus, aggregate planning provides justification for requested budget amount. Accurate medium-range planning increases the likelihood of attaining the requested budget and operation within the limits of budget.

In next section we provide instances of medium-range planning in both manufacturing and service settings. These, example illustrates the tradeoffs linked with different production planning strategies.