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Once you have information as to the quantities that are to be sold, you will have to foresee the quantities that will be produced and the level of stocks of raw materials and finished products. Broadly, the production plan describes how the company is going to produce its products or services and all critical decisions required by the process. Here you also predict production costs as well as the costs by each sold unit.
Basically, the production plan may be translated into the following chart:
The production plan identifies the production costs and allows you to know which the areas of possible cost reduction are...
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