A production plan must answer four basic questions:
1. What are we going to make?
2. What does it take to make it?
3. What do we have?
4. What do we need?
The answers to these four questions form the basis of a production plan. (Introduction to Materials Management Arnold and Chapman, 2001, p.17)
A production plan prioritizes the production needs of the organization, and balances that with the capacity of the company to produce those products.
A production plan crosses many functions of a company, including forecasts, setting inventory levels, sourcing components, adjusting production capacity and staffing, and making necessary financing available.