Planning Factors

TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
View All

Planning factors are essential elements for any well run organization. This includes production planning, which is used to determine the number and quality of raw materials, machines, supplies and employees needed to produce a product. These planning factors should also include plans for inventory, material procurement, and shipment and delivery planning. The planning process will not only determine how much a company can produce; it will also determine how much it needs to distribute in order to meet its customer's demands.

The ultimate goal of developing a comprehensive economic development strategy is the creation of sufficient quantities of capital assets that will make it possible to create a sufficiently large market for your product or service. The planning process also includes the determination of a company's cost effective mix of the various inputs necessary to achieve the desired result. This mix is typically defined by the type of business, including whether it is a manufacturing concern, or a service concern, such as distribution. In determining the mix, economic development planning factors must be considered. If a particular concern falls outside of the overall concern, then it should be balanced out by creating a separate economic development planning factor.

For example, if a company intends to build a plant that will employ hundreds of workers, it must carefully consider transportation planning factors. It is important to determine how the workers will get to and from their work locations and whether the expense of building a heavy hauling road to provide this facility will offset any savings obtained by locating the plant within an existing metropolitan area. Likewise, if the production will require the use of several large conveyor systems, the costs associated with establishing and operating these systems will be additional weight added to the cost of construction. Therefore, it is important for the metropolitan planning committee to consider how to balance the relative costs of both types of major project.

CIOP Webinar Series

Learn the Global Best Practices in Supply Chain Management, Procurement, and Inventory Management.

60 Minutes of Learning + PDU Letter

Register Now

Do Do you want more information on Certified Inventory Optimization Professional?

Fill in the form to download the quote.