Kartik works as a production analyst at 'Shree Tyres'. During the board meeting for the financial year 2022 – 23, the target production of tyres for the year was decided at 6 lakh units. The Managing Director of the company asked Kartik to prepare a blueprint in advance and 'work your plan'. He also added that this blueprint will ensure orderly flow of materials in the manufacturing process from the beginning to the end. Identify and explain the component of 'Business Plan' being discussed by the Managing Director.

Question

Accepted Answer

Operational Plan. It is a blueprint prepared right in advance of actual operations. Importance: i) Ensures orderly flow of materials from raw state to finished products. ii) Facilitates continuous production, lesser work-in-progress. iii) Co-ordinates work of engineering, purchasing, production, selling and inventory management. iv) Describes flow of goods from production to consumers. v) Introduces proper system of quality control. vi) Undertakes best and most economic production policies.