The process of gathering different data results using correct sources and striving to minimize the cost value spent on inventory and production is called integrated production planning. The data used for integrated production planning are as follows:
• Demand forecasts,
• Inventory status,
• Order quantities,
• Labor levels,
• Management policies,
• Capacities of production sites,
• Availability of materials,
• Production and cost standards,
• Competitors' behavior,
• Economic conditions.
Each of the items mentioned above is gathered through the correct sources to obtain new data. The aim is to minimize the cost value spent on inventory and production with these obtained data. An integrated production plan can be created between three to twelve months. It is necessary to consider periodic product demands and available production resources while making integrated production planning. This way, longer-term plans can be developed. Measurements such as tons, customer quantities, and man-hours are criteria for holistic planning.

The primary objective of integrated production planning is to create the most suitable manufacturing plan for the requested product alongside identifying the final demands from consumers. In creating this plan, the materials, capacities, purchase processes, and all schedules created related to these must be planned in an integrated manner. Creating an integrated production plan helps achieve various gains as well.

The stock status in inventory, the emergence of more capacity utilization areas, and the reduction in the manufacturing time of products bring several benefits as well. Many companies, where demand continuously changes and various manufacturing processes occur in accordance with this variable demand, can use production resources more efficiently thanks to integrated production planning. Integrated production planning starts with demand data and concludes with scheduling and controls.

Another important objective of integrated production planning is to minimize losses of products used in manufacturing while changing manufacturing methods according to customers' wishes and demands. For instance, integrated planning should be carried out diligently to avoid losses when transitioning to a new production while using machines, arising equipment malfunctions, or capacity levels.

Integrated production planning is related to determining total market quantity, production status, inventory, and labor levels based on the diversity of products demanded. The group planning created by considering company policies, demand forecasts, strategic objectives, financial and capacity constraints determines labor size, inventory status, sales losses, normal and overtime productions. Main production, material requirements, and capacity amount plans are generated based on integrated production planning. Certain stages must be conducted to create the integrated production planning. These stages are as follows:
• Creating weekly, monthly, or quarterly sales forecasts for each product,
• Evaluating total demands based on the forecasts made,
• Converting workers, machines, and materials, which play an active role in production, into production capacity,
• Finding alternative resources for production capacity and improving existing resources.

Integrated Production Planning

Integrated production planning is a method aimed at developing a general production plan in a facility that provides uninterrupted production. Integrated production planning can generally be applied from 3 months to 18 months.

Integrated production planning is a planning method that typically focuses on production to analyze and coordinate the production plan, improve production, and maintain consistent production.

With integrated production planning, the production costs of the facility or company are minimized while meeting demands.

For integrated production planning, production speed, labor, capital, and other controllable variable factors are adjusted to maximize the yield from production and meet the demand.

Almost every stage of product supplies is carried out based on integrated production planning. For integrated production planning, it is required to have information on production costs, required labor per unit, machine operating time, inventory holding costs, pending order costs, and overtime in the business.

What are the Integrated Production Planning Strategies?

One of the most important parts of business strategies is integrated production planning strategies. There are several questions that the planner should answer when creating integrated production planning. Some of these questions are as follows:
1. Is there sufficient inventory to meet demand fluctuations during the planning process? Can inventory be used in such cases?
2. Should changes be made in the workforce to address the changes, or should different methods be developed?
3. Is it necessary to do part-time or overtime to eliminate fluctuations?
4. Can subcontractors be used to keep the normal labor level steady when creating orders?
5. Should changes be made in prices and other factors to influence the demand quantity? Planners who answer these questions implement integrated production planning based on these responses, utilizing data they can control regarding stock status, production rate, capacity, and any other situations that may arise.

What Inputs are Used in Integrated Production Planning?

Integrated production planning is a type of production planning that determines the production quantity and time for a period ranging from three months to eighteen months. In other words, it involves planning the operation of production activities to meet expected product demand for the current period. Certain inputs are used when creating integrated production planning. Outputs also result from the integrated production planning formed by these inputs. The inputs that constitute integrated production planning are as follows:
• Business Policies,
• Strategic Goals,
• Capacity Limits,
• Financial Constraints,
• Demand Forecasts,
Integrated production planning is significant in terms of production and the operation of production. Production quantity, order quantity, inventory level, labor, workers hired or laid off are all factors in creating integrated production planning.

Costs Related to Integrated Production Planning Strategies

It is very important for companies to consider the strategies in integrated production planning regarding the products they are producing and evaluate these strategies according to their costs. Particularly, it is crucial to examine the strategies individually, considering costs, and comparing them with each other.

Cost of Changing Workforce Size

Generally, it can be considered the most costly strategy from the perspective of the facility or company. Changing the workforce size; as the name implies, is a strategy implemented by hiring new employees or laying off other employees. Hiring new employees for the company or facility means new salaries and increased outputs, thus leading to the perception that this is the most costly strategy.

On the other hand, changing workforce size by laying off employees can also result in similar adverse circumstances. Especially when employees are constantly laid off, this may negatively affect society or prospective employees who want to start working in the firm. Additionally, if too many workers are laid off, the workforce diminishes or layoff costs increase. This is one of the situations that negatively affects the company or facility.

Cost of Holding Inventory

The cost of holding inventory refers to the capital costs associated with being in possession of stock. The cost of holding inventory is obtained in exchange for a certain monetary value. This cost is generally considered in terms of warehouse expenses, rent, insurance, and damaged goods.

Cost of Not Holding Inventory

The cost of not holding inventory is a situation that can arise when the number of demands exceeds the production quantity. In this case, firms and facilities may prefer to postpone orders. However, since companies and facilities are in competition, those that choose to postpone orders may suffer from customer loss.

Normal Overtime Costs

Normal overtime costs include the costs of producing one unit of output during overtime hours. These costs consist of the wages given to workers during normal working hours, material costs, and other production expenses.

Overtime and Subcontractor Costs

Overtime and subcontractor costs are production costs incurred during additional hours worked outside normal working hours. Overtime is when workers work outside their normal working hours. A subcontractor means production carried out in conjunction with a producer outside the firm. It is generally possible to say that overtime and subcontractor costs are linear. However, in situations where the production speed has increased, overtime hours may lead to a decrease in workers' productivity.

Methods Developed for Integrated Production Planning Problems

Integrated production planning is a type of problem aimed at determining production quantity, labor, increases and decreases in inventory, and finally the subcontractor level to meet estimated demand amounts. Through solutions to integrated production planning problems, the production capacity and quality levels are determined. Changes in the demand graph can be achieved steadily with integrated production planning problems. While doing this, the costs of changing capital and production speed are taken into account. The most effective method that can be applied to integrated production planning problems is to keep the variables as flexible as possible. Moreover, methods developed for integrated production planning problems can be categorized into three:
● Classical Methods
● Graphical Methods
● Mathematical Optimization Methods
as listed.

Advantages and Disadvantages of Integrated Production Planning

As mentioned above, integrated production planning is an essential tool that aids in labor and production levels for a firm or facility. Like any planning, integrated production planning also has various advantages and disadvantages that companies should consider.

One advantage of integrated production planning is its ability to prepare demand forecasts at a product level, effectively preventing various variables like productivity and cost from becoming hindrances. Another advantage is that integrated forecasts tend to be more accurate than individual forecasts. Thus, the illusions that individuals may make are less valid in integrated production planning.

Along with the advantages of integrated production planning, there are also disadvantages. One disadvantage of integrated production planning arises from the difficulty in correctly identifying the integrated unit. Another disadvantage is that it is often challenging to make the necessary forecasts about demand and cost. The third disadvantage of integrated production planning stems from the assumption that the production and labor speed can change easily. While the productivity of some workers may be higher, others may be lower. In such cases, mathematically approaching the situation can be misleading.

What are Examples of Integrated Production Planning?

The integrated production planning strategy is divided into two different areas. One is capacity options; the other is demand options. The purpose of capacity options is to change inventory levels, make changes in workforce size, increase production rates by modifying working hours, maintain the current workforce level by using subcontractors, and hire new workers specifically related to that production. Company managers can increase product stock by carrying out future-oriented production based on demand forecasts. This situation will, of course, result in an increase in the cost section as well. However, if there is an increase in demand volume for a product in future periods and that product stock is unavailable, it can lead to a more significant cost loss in production to meet the demand at that moment.

To meet the generated demand, there may also be additional hiring or layoff of workers based on the decrease in demand. At the same time, new hires can lead to disruptions in the existing production process since new workers' learning periods will affect productivity. Additionally, to close the production gap caused by demand fluctuations, there could be additional overtime or workers, or they may negotiate with subcontractors to increase labor force. While using subcontractor companies can be beneficial for influencing changes in the workforce and speeding up production, it may also lead to reduced profit margins and decreased job security.

The purpose of demand options is to influence the generated demand quantity, postpone orders during periods of high demand, and produce seasonal complementary products in addition to the demands. Businesses can increase demand quantities either through advertisements or price changes. They can also add seasonal by-products to the products demanded from time to time to increase sales.

Seasonal products can have discounts and promotions after their season ends. For example, winter boots, coats, and sweaters may be offered at discounted prices at the beginning of the summer season; similarly, this could apply in reverse circumstances. Airlines, hotels, or vacation spots may try to attract customers and sustain sales through various discounts and promotions after the season has ended. Lastly, in situations where demand is high but stock is insufficient, they may find ways to postpone orders. If a customer is decisive about the product and wishes to wait for stock availability, postponing an order does not have a negative impact on the companies. However, in some cases, postponing orders may present disadvantages to companies, as it may lead to a decrease in existing sales.