The paper proposes an interaction/prediction approach to interaction-delay-based hierarchical production planning and control in flexible automation workshops (FAWs). A mathematical model with delay interaction equations is built up to solve the problem of hierarchical production planning (HPP) in FAWs. An interaction/prediction algorithm for HPP is then deduced in detail and its properties and necessary condition for feasibility are proved. The algorithm has been adopted to develop the software package named as interaction/prediction algorithm with interaction-delay (IPAD), by means of which, examples of HPP in FAWs have been studied. In this paper, the application of the algorithm is introduced in detail through one of those examples. As compared with the existing HPP approaches, the present algorithm is more suitable for decomposing optimally medium-term plans (assigned to an FAW by CIMS/MRP II) into short-term plans (to be executed by FMSs in the FAW), especially for the case that workpieces are transported between FMSs through a shop storage with a delay of a step.