Final answer:
The master production schedule informs what items to produce, when to produce them, and the quantities to be produced, while addressing fundamental economic production questions regarding product choices, processes, output levels, pricing, and labor requirements.
Step-by-step explanation:
The master production schedule (MPS) is a crucial component in manufacturing, dictating what end items are to be produced, when they are to be produced, and how many should be created. This planning tool addresses fundamental economic questions, such as:
- What product or products should the firm produce?
- How should the products be produced (i.e., what production process should be used)?
- How much output should the firm produce?
- What price should the firm charge for its products?
- How much labor should the firm employ?
These questions are vital for a firm's strategic planning and are revisited often to ensure efficiency and profitability in the long run. Optimizing the production process and determining the proper output are central to a firm's success.