Production Planning, Quality, Costs, and Market Dynamics

Posted on Jan 13, 2025 in Business Administration and Management (BAM)

Production Planning

Production planning is a phase that combines long-term and short-term planning.

  • Strategic Plan: Forecasts the objectives of a company, production capacity, and investment plans.
  • Sales Forecast: Relates sales potential with the production necessary to meet them.
  • Production Master Plan: Structures material requirements and labor costs in relation to the company, setting a production management framework.
  • Production Program: Determines production orders, taking into account the available productive factors according to the master production plan, and sets deadlines for suppliers and customers.

The planning system must be completed with a system of controls at two levels:

  • Operational Control of Production: Regulates production scheduling in relation to adaptation to change.
  • Economic Production Control: Monitors and studies the costs of production.

The Quality of the Company

Quality is an element that determines the objectives of production management. The quality of the products determines the competitiveness of the company in the market, impacts the cost structure of the company, and may even influence the overall profitability of the investment. This management can be done in several ways:

  • Inspection Techniques: Ensure the required quality is obtained.
  • Process Control: Properly design the systems of production to prevent problems.
  • Integrated Quality Management: Involves all areas of the company in product quality.
  • Total Quality: Extends the link to product quality to the quality of the organization.

Production Costs

  • Fixed Costs: Do not change if the quantity produced changes. Examples include the value of fixed assets and venue hire.
  • Variable Costs: Are proportionate to the amount of production, such as raw materials.
  • Direct Costs: Are directly associated with production and can be assigned to each product.
  • Indirect Costs: Affect the production process in general and are common to different products.

Types of Markets

  • Perfect Competition: Occurs when a company meets the following conditions: homogeneity of product, large numbers of suppliers and buyers, market knowledge, and total freedom to enter and exit the market.
  • Imperfect Competition: Occurs when any of the characteristics of perfect competition are not met. Examples of imperfect competition include:
    • Monopoly: Only one seller and many buyers.
    • Oligopoly: Few sellers and a large number of buyers.
    • Monopolistic Competition: A large number of buyers and sellers of a product that is not homogeneous.

Basic Principles of Advertising

  • Attract attention.
  • Arouse interest.
  • Create a desire to have the product.
  • Encourage action.

Phases of Market Research

  1. Definition of the objective of the research model.
  2. Design of the research model.
    • Internal company information
    • Statistical data
    • External research
  3. Data collection.
    • Primary data: Surveys, observation, experimentation
    • Secondary data
  4. Classification and data structuring.
  5. Analysis and interpretation of data.
    • Analysis of the overall environment
    • Competition analysis
    • Consumer analysis
  6. Presentation of data (report).
    • Analysis of the problem
    • Analysis of the methodology
    • Technical results
    • Conclusions