Abstract This paper presents an understandable and straight-forward method for making work force level and inventory planning decisions, i.e., dynamic aggregate planning decisions. The development phase utilizes a ratio, named RPCC, which represents the relative value of the cost of changing the production level to the cost of carrying inventory. This ratio is used to determine the length of an effective planning horizon. Two indicators are calculated to reflect the demand to current production rate over different time periods. Based on the joint values of these indicators, the planning problem is subdivided into one of nine mutually exclusive and exhaustive states. A set of action statements, representing logical responses to each of the sub-problems, is formulated. After completion of the development phase, the performance of the Production Decision Framework model is tested in several real case environments. Suggestions are made for further improvement.
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