AbstractThis paper extends earlier hierarchical production-planning approaches initiated by Hax and Meal. The proposed model incorporates both functional and hierarchical interfaces simultaneously as encountered in practice, and assures feasibility and consistency among the decisions made at the different hierarchical levels of the firm. The problem of infeasibility which arises in disaggregating the aggregate production plan into detailed schedules is solved using goal programming at the product-family disaggregation level, and using branch and bound at the item-disaggregation level. The proposed approach minimizes backlogging regardless of the underlying cost structure of the problem at hand.