One-Item Single-Facility Aggregate Production Planning Problems

Aggregate production planning is the problem of deciding about a firm’s production policy, i.e. on the quantity of products to be produced during a period of time. This decision is made on the basis of a product demand forecasted over a given planning horizon, as well as on the basis of many other factors within the manufacturing environment: costs, equipment and manpower flexibility, inventory constraints, etc. Since aggregate planning is a fundamental part of the firm’s overall business strategy, its optimization can lead to major improvement in the fiirm’s profits.