How should the production allocation be made?
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How should the production allocation be made?
- Allocation of production request/allocation must follow the strategy.
- How much you think you can sell in each of the four markets? How much you want to sell in each market and why? One thing is always true. A company makes decisions to change the market potential for its product in order to sell more.
- You have only so much raw materials in inventory that become the limiting factor to production request/allocation.
- Some markets may have higher potential than others under the market conditions set for markets 1, 2, 3, & 4.
- You should make request/allocation for each market to meet potential demand of that market but within the limit of the inventory of raw materials.
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