Network production planning method

Abstract

Methods of production planning, including a novel method of optimized production planning for a plurality of production plants producing a product for delivery to a plurality of customers using a common distribution network, wherein the product consumption by customers can vary, and the variable cost of producing the product can vary between production plants, over time, and production quantity. The method maximizes profitability by characterizing raw material costs over varying production rates and minimizing variable cost across the network for any given production demand. The method considers the variable cost of producing product in varying production quantities, the variable cost structure of raw material supplies, and how these variable costs vary between production plants. The method also considers the variable cost impact of purchasing product from outside sources. The method produces monthly, weekly, daily, or hourly production plans and can automatically set target production quantities for each production plant to provide the lowest variable cost plan for a given production demand.