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A proper profitable production plan can only be done on the basis of demand forecast. Planning will depend on the type of product, i.e. perishable or long life in case of food, durables, home appliances, engineering or automobile spares - each product or product group will have it's own criteria to be considered.
Simply put, the law of diminishing returns refers to a point at which the level of profit or benefit gained is less than the amount of money or energy invested. There will be a point after which producing another item or commodity would simply not be worth it or economically feasible.
Just as in purchasing we have economic ordering quantity that makes buying worthwhile or profitable so also in production there is a minimum batch size or quantity that makes the whole process of manufacturing worth the time, effort, and money to produce that quantity.
Demand is very essential as insufficient demand for a certain product, especially food and still specifically perishables like dairy products, would not be economically feasible to produce.
The important thing in production is being prepared , always be on topof prodviding task on the timely manner and using staff prodcutivity to maximize output with minimizing work load by using construtive paradigm method
