2- Production planning models and systems Flashcards
What are the three classical production planning model?
1) Single-item uncapacited lot-sizing model (LS-U)
2) Master Production Schedule (MPS)
3) Material Requirement Planning (MRP)
General properties of Uncapacitated Lot-Sizing Model (LS-U)
Single-item, single-level, uncapacitated
Minimize total cost
Production cost (fixed + variable)
Inventory cost per unit in inventory at the end of each period
Satisfy all demand
Backlogging not allowed
No production capacity (infinite)
State the LS-U
Sets:
T = {0, . . . ,t, . . . , n}: discrete time periods
Parameters:
pt
: unit production cost in period t
qt
: fixed production cost in period t
ht
: unit inventory cost in period t
dt
: demand in period t
Decision variables:
xt
: production lot size in period t
yt
: binary variable for period t (yt = 1 if xt > 0)
st
: inventory at the end of the period t
(LS-U) min sum (pt xt + qt yt + ht st) for t∈T :t≥1
st−1 + xt = dt + st t ∈ T : t ≥ 1 (2)
s0 = sn = 0 (3)
xt ≤ Mt yt t ∈ T : t ≥ 1 (4)
xt ≥ 0 t ∈ T : t ≥ 1 (5)
st ≥ 0 t ∈ T (6)
yt ∈ {0, 1} t ∈ T : t ≥ 1 (7)
General properties of Master production scheduling Model (MPS)
Multi-item, single level, capacitated lot-sizing model
Production of a set of items (finished products)
Short-term horizon (at least total production cycle)
For each item, the model is the same as the LS-U
The items production plans are linked: capacity restrictions and common resources
State the Master production schedule (MPS)
General properties of the material requirement planning (MRP)
State the material requirement planning (MRP)
Make-to-stock (MTS)
Make-to-stock (MTS): independent demand must be already in stock
All procurement and production activities in anticipation of the demand (demand
forecasts)
Ideal for standard products, little variety or diversity (fast-moving consumer goods)
Make-to-order (MTO) or Assemble-to-order (ATO):
Some activities are performed after the external ordering
Delivery lead-time: time promised to customers for delivery
At the time of ordering: enough raw materials or semi-finished products in inventory
Remaining production lead-time ≤ commercial lead-time
Push phase (upstream)
Push phase (upstream) plans the procurement and production from raw materials up to
semi-finished products (demand forecast of semi-finished products)
Pull phase (downstream)
Pull phase (downstream) plans the production from semi-finished products (in
inventory) up to finished products (effective customer orders)
For which production policy is MRP used?
Customer-service leve
Customer-service level =% customer demand delivered on time
(minimal planning horizon length)
Total lead-time represents the required anticipation time in the planning process
(minimal planning horizon length)
Rolling-horizon approach:
the solution proposed for the early time periods is
implemented, the model parameters are updated, the model is solved again,…
Bill of materials (BOM) to compute dependent demand
Link BOM and MRP
Aspects of the MRP
1) Independent demand over the planning horizon d-i_t
2) Bill of materials (BOM) to compute dependent demand
3) Procurement and production lead-times (LTs)
4) Routing of components
5) Capacity of resources
6) Inventory records
7) Planning rules
Includes of the Independent demand over the planning horizon d
i_t
demand from customers
spare parts demand
demands from the distribution
System or other facilities
Procurement and production lead-times (LTs)
Procurement and production cannot be performed instantaneously: the BOM
includes LTs
Total time needed to complete orders, preparation, administration, waiting,
production, control tests, delivery (integer number of periods)
In MRP model, LTs constant over times and independent of the order size (input)
Link LTs and MRP
The procurement or production LT is modeled in (2) by γ
i
The number of time periods n ≥ the sum of γ
i
along any path in the BOM graph
γ
i
(planning)! = production lead-time
Routing of components and link to MRP
Link Capacity of resources to the MRP model
Link capacity of resources and MRP (1) – (8): The net capacity of resource k in
time period t is modeled in (5) by L
kt
Gross requirement:
total consumption (internal and external) of the components over
time
The inventory status of each component
on-hand inventory: physically in the warehouse
allocated inventory: part of the on-hand inventory, but reserved for production orders
already released
back orders: overdue or late component orders which will be delivered soon
on-order inventory: already ordered, but not yet received (scheduled receipt time period is
known)
3 different measures for inventory
Available inventory = on-hand inventory - allocated inventory
Inventory position = available inventory + on-order inventory - back orders
Net requirements = gross requirement - available inventory - on-order inventory
Planning rules and link to MRP
What are the phases of the single item decomposition planning process?
1 Master Production Scheduling (MPS)
2 Rough Cut Capacity Planning (RCCP)
3 Final Assembly Scheduling (FAS)
4 Material Requirement Planning (MRP)
5 Capacity Requirement Planning (CRP)
Grafik: Single item decomposition planning models for a MTS policy
MPS scheme in Single item decomposition
Rough Cut Capacity Planning (RCCP)
- Final Assembly Scheduling (FAS)
Grafik: Planning models (item decomposition) for an ATO policy
Steps of MRP in single item decomposition
Capacity Requirement Planning (CRP)
Limitations of MRP decomposition scheme
Supply Chain (SC) definition
A supply chain (SC) is a set of organizations linked by materials, information and
financial flows that produce value in the form of products and services for the
ultimate customer
A Supply Chain modeled as a network composed of….
- vendor nodes
- plant nodes
- distribution center nodes
- market nodes
- transportation arcs
Supply chain planning is an integrated planning approach used to organize the SC
activities: (name the three integration dimensions)
Functional integration of the primary and support activities
Inter-temporal integration (strategic, tactical, operational planning horizons)
Spatial (räumlich) integration
Architecture of Advanced Planning Systems
Two generic classes of supply chain planning problems which consider the entire
supply chain:
1 Strategic network design problems
2 Supply chain master planning problems
Strategic network design problems
Supply chain master planning problems
