SummaryIn this paper a system of cost‐controlled production planning is described. This system considers all kinds of costs associated with a production in phases (e.g. production of units, production of subassemblies, assembly) which may be affected by the planning, such as set‐up costs, costs of transport, control, inventories, capacity and changes in capacity.The mathematical model leads to a linear or mixed discrete‐linear programming problem whose solution gives for each time period considered the size of the capacities which should be used and of the series of different products which should be produced. Practical recommendations are given for obtaining a sufficiently satisfying sol