Final answer:
An initially unfeasible master production schedule from MRP can be analyzed and adjusted using the PPF curve, which shows the trade-offs between different production scenarios. The PPF curve accounts for technological improvements and resource availability, and helps in finding the optimal balance of inputs for maximum efficiency.
Step-by-step explanation:
A master production schedule (MPS) is the output from Material Requirements Planning (MRP), which may initially give rise to a schedule that does not appear to be feasible. This incongruity may be due to constraints in production, such as labor, machinery, or material limitations. To visualize changes in production capacity or efficiency, such as those brought about by improved technology or resources, a Production Possibilities Frontier (PPF) is used. This frontier is typically drawn as a curve rather than a straight line to represent increasing opportunity costs between different choices of production.
The PPF curve illustrates the trade-offs between two goods or services that an economy can produce, given its technological capabilities and the amount of resources available. When technology improves, or more resources are available, the PPF shifts outwards, indicating the ability to produce more goods. Understanding the optimal number of workers and production stages is critical for maintaining efficiency. In the context mentioned, Stage 3 indicates over-employment where the marginal output has become negative due to too many workers hindering each other's efficiency, causing overall factory output to decrease.
Ultimately, the MPS must be adjusted to consider real-world constraints and ensure it is feasible and efficient. Only by calculating and understanding the costs associated with each additional worker or unit of production can a company find the equilibrium that maximizes output without incurring negative returns.