Production lot sizing model with insufficient production capacity

A mathematical model is developed for determining the optimal number of batches for the production lot sizing problem where the production capacity is lower than the annual demand requirement. Setup time is included and it is assumed that consumption begins only after the entire batch is produced. The model is illustrated through an example.     

Production planning in a MRP/JIT repetitive manufacturing environment

Some literature suggests that the best approach to production planning is a complete implementation of just-in-time. It has also been suggested that JIT replaces material requirements planning, and computerized procedures are an unnecessary complex burden on management especially in a highly repetitive environment. This article examines the JIT programme at the John Deere Engine factory. In 1985 the factory began a JIT programme with the belief that it would replace their MRP system. The results of the JIT programme are examined and management's conclusion that the best approach is a blend of JIT and MRP is explored.     

Fix-and-optimize and variable neighborhood search approaches for multi-level capacitated lot sizing problems

In this paper, a new fix-and-optimize (FO) approach is proposed for two dynamic multi-level capacitated lot sizing problems (MLCLSP), the MLCLSP without setup carryover and the MLCLSP with setup carryover. Given an MIP model of a lot sizing problem, the approach iteratively solves a series of sub-problems of the model until no better solution can be found. Each sub-problem re-optimizes a subset of binary decision variables determined based on the interrelatedness of binary variables in the constraints of the model, while fixing the values of the other binary variables. Based on the FO, a variable neighbourhood search (VNS) approach for the MLCLSP without setup carryover is also developed, which can further improve the solution obtained by the FO by diversifying the search space. Numerical experiments on benchmark instances show that both our FO and VNS approaches can obtain a better solution for most instances compared with that found by the fix-and-optimize approach proposed by Helber and Sahling (International Journal of Production Economics 2010;123:247–256).     

A simulation of single-level MRP lot sizing heuristics: an analysis of performance by rule

This paper presents the results of a large-scale computer simulation of 12 of the standard single-level, discrete demand lot sizing heuristics. The authors present the results in 3-D illustrations which depict the performance of these heuristics on 15 individual demand patterns. This information is prefaced by a brief review of the method used to perform the simulation. The performance of each of the 12 heuristics was evaluated for 51 sets of cost parameters for each of 15 different demand patterns. This has resulted in the analysis of 9180 combinations of heuristic, demand pattern, and cost parameters. The authors believe that this, by far, represents the largest digital simulation of single-level lot sizing rules completed to date. During the past two decades, a significant amount of research investigating the economics of lot sizing single-level discrete demand patterns has been conducted. However, many of the conclusions reached by individual research efforts on this subject have differed. At various times a lot sizing heuristic has performed best in one study, only to have findings refuted in a later analysis. Overall, this has led to a certain degree of confusion and mistrust of the heuristics themselves. The authors believe that there are three major reasons why previous research efforts have reached various conclusions. First, previous studies have included only subset of the possible heuristics. Second, previous studies have used different methods of calculating holding costs. Finally, previous studies have used demand patterns so short that a large percentage of transient noise is contained in the performance data.     

Optimizing lot size and setup time in a JIT environment: a multiple objective application

The just-in-time (JIT) system has been studied extensively and implemented by a number of US firms as an ell'ective production system. The core of JIT involves determination of lot size and setup time reduction so as to increase manufacturing flexibility while minimizing the inventory level. This decision problem usually involves multiple conflicting objectives and mixed-model production. In this paper, goal programming (GP) is applied to a real-world JIT problem involving fabrication of different automotive and industrial rubber composite belts. The model results provide new insights concerning the conflicting nature of several goals, especially between meeting demand and reducing setup or idle time. Also, the GP solution is superior to the current JIT practice of the company.     

The effect of MRP lot sizing on actual cumulative lead times in multi-level systems

This study investigates how different lot sizing techniques influence the cumulative lead time for multi-level production-inventory systems controlled by material requirements planning (MRP). Theoretical approaches, a numerical example, as well as simulation are used to analyse and illustrate the combined effect of lot sizing at different product structure levels. It is shown that lot-sizing requirements for more than a single period, such as fixed period requirements, period under quantity, Silver Meal algorithm, as well as economic order quantity will lead to longer actual cumulative lead times than would be expected, when taking the item lead times along the critical path through the product structure into account. Consequently, MRP will underestimate the cumulative lead time and will require a longer planning horizon. We show that the extension of the cumulative lead techniques covering the time is a lot-sizing related phenomenon and cannot be accounted for by, e.g. using safety lead time. Lot-sizing techniques with multi-period coverage will only occasionally provide the 'expected' cumulative lead time. We also show that average and maximum throughput times, as well as throughput time variability increases with increasing time-period coverage of lots.     

Combined demand and lead time uncertainty with back-ordering in a multi-level product structure environment

The performance of two lot-sizing algorithms incorporating back-orders is evaluated and compared with several traditional lot-sizing rules. This comparison is undertaken for a multi-level product structure environment operating under a rolling horizon in the presence of both demand and lead time uncertainties. By means of simulation and statistical analysis of the simulation output, the impact on system performance of a variety of demand and lead time scenarios, product structures, cost parameters and lot-sizing, is evaluated. The conclusions drawn emphasize important differences in the influence of the factors on system performance given the presence or absence of uncertainty.     

A review of capacity planning techniques within standard software packages

This paper gives a review of capacity planning techniques from which today's standard software packages for production control make their choice. The following techniques are discussed in the paper: four variants of the rough cut capacity check, capacity requirements planning with infinite and finite loading, input/output planning without and with individual work orders, and a number of sequencing techniques. An important issue throughout the paper is the concept of robustness and nervousness of planning techniques, Aspects of interaction between techniques and human planners arc given. The human planner is still an important factor in capacity planning.     

Lot sizing and scheduling: a survey of practices in Brazilian companies

The lot sizing and scheduling (LSS) problem has motivated much research in production planning and control. However, while there are many papers on modelling this problem, there is scant research on how it is addressed in the industry. We present a survey of Brazilian industry practices in LSS, intending to understand the problem faced by operations managers, drawing parallels with academic findings to identify gaps between theory and practice and opportunities for future research. We confirm that the main objective of practitioners in companies operating under MTS strategy is to maximise service level, followed by inventory reduction. Availability of raw material, demand uncertainty and safety stock levels, lack of decision support software and the impact of sequence-dependent set-up times are other major concerns highlighted by the practitioners. Lastly, we confirmed that despite the relevant body of research on this problem, there is still a large gap between theory and practice.     

Freezing the master production schedule in multilevel material requirements planning systems under deterministic demand

This paper extends the studies by Sridharan, Berry, and Udayabhanu from single-level MPS systems to multilevel material requirements planning (MRP) systems, and examines the impact of product structure, lot-sizing rules and cost parameters upon the selection of MPS freezing parameters under deterministic demand. A model is built to simulate the master production scheduling and material requirements planning operations in a make-to-order environment. The results show that all the MPS freezing parameters studied have a significant impact upon total inventory costs and schedule instability in multilevel MRP systems. First, the order-based freezing method is preferable to the period-based method. Secondly, the study finds that increasing the freezing proportion reduces both total inventory costs and schedule instability. This finding contradicts the finding by Sridharan et al. in single-level systems. Thirdly, the study finds that a higher replanning periodicity results in both lower total inventory cost and lower schedule instability. The study also indicates that the product structure and lot-sizing rules do not significantly influence the selection of MPS freezing parameters in a practical sense under most situations. However, the cost parameter seems to significantly influence the selection of replanning periodicity.     

Exploring the antecedents of potential absorptive capacity and its impact on innovation performance

This paper builds upon the theoretical framework developed by Zahra and George [Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review 2002;27:185–203] to empirically explore the antecedents of potential absorptive capacity (PAC), i.e. the ability to identify and assimilate external knowledge flows. Based on a sample of 2464 innovative Spanish firms, we find evidence that R&D cooperation, external knowledge acquisition and experience with knowledge search are key antecedents of a firm's PAC. Also, during periods of important internal reshaping, when there are significant changes in strategy, design of the organization and marketing, firms exert more effort to accumulate PAC. Finally, we find that PAC is a source of competitive advantage in innovation, especially in the presence of efficient internal knowledge flows that help reduce the distance between potential and realized capacity.     

Lot sizing in case of defective items with investments to increase the speed of quality control

In many cases the quality of each item in a lot is checked. Speeding up the quality checking process increases the responsiveness of the system and saves cost. The percentage of defective items is a random variable and two models are proposed. In one of the models the system remains always at the same state, while in the other one after each order cycle, the state of the system may change, thus the percentage of defective items may be different in consecutive periods. In both cases the speed of the quality checking is a variable, and procedures are provided to find the optimal lot sizes and screening speed for general and specific investment cost functions. The characteristics of the two model settings will largely be different when the percentage of defective items is high. Among the important managerial insights gained is that a high unit backlogging cost, especially spurs the system to invest more intensively into improving the quality checking process.     

Reference model for implementing an MRP system in a highly diverse component and seasonal lean production environment

Companies are currently choosing to integrate logics and systems to achieve better solutions. These combinations also include companies striving to join the logic of material requirement planning (MRP) system with the systems of lean production. The purpose of this article was to design an MRP as part of the implementation of an enterprise resource planning (ERP) in a company that produces agricultural implements, which has used the lean production system since 1998. This proposal is based on the innovation theory, theory networks, lean production systems, ERP systems and the hybrid production systems, which use both components and MRP systems, as concepts of lean production systems. The analytical approach of innovation networks enables verification of the links and relationships among the companies and departments of the same corporation. The analysis begins with the MRP implementation project carried out in a Brazilian metallurgical company and follows through the operationalisation of the MRP project, until its production stabilisation. The main point is that the MRP system should help the company's operations with regard to its effective agility to respond in time to demand fluctuations, facilitating the creation process and controlling the branch offices in other countries that use components produced in the matrix, hence ensuring more accurate estimates of stockpiles. Consequently, it presents the enterprise knowledge development organisational modelling methodology in order to represent further models (goals, actors and resources, business rules, business process and concepts) that should be included in this MRP implementation process for the new configuration of the production system.     

The impact of component commonality in an assemble-to-order environment under supply and demand uncertainty

A material requirements planning simulator with a two-level bill-of-material is used to study the impact of introducing component commonality into an assemble-to-order environment when demand is subject to random variations, and component procurement orders experience random delays. By using simulated data, our ANOVA results show that component commonality significantly interacts with existence of demand and supply chain uncertainties, and benefits of component commonality are most pronounced when both uncertainties exist.     

PPP项目中信任对商业模式创新行为影响的实验研究:社会资本创新能力的调节作用

本文通过文献分析构建了以社会资本感知的信任为自变量、商业模式创新行为为因变量、社会资本创新能力为调节变量的理论模型。采用问卷调查的方式开展情境模拟实验,并采集到119份有效的实验数据。运用方差分析处理实验数据,对提出的理论模型进行实证检验。研究结果显示:(1)信任的三个维度(制度信任、认知信任、情感信任)对商业模式创新行为的产生和执行均具有显著正向影响;(2)制度信任对商业模式创新行为产生、执行的影响不受社会资本创新能力的调节,而情感信任对商业模式创新行为产生、执行的影响均受到其调节;(3)认知信任对商业模式创新行为产生的影响受到社会资本创新能力的调节,而认知信任对商业模式创新行为执行的影响不受其调节。在此基础上,本文为政府及相关部门激励社会资本进行商业模式创新提出策略建议。     

Modelling and analysis of dynamic capacity complexity in multi-stage production

The uncertainty associated with managing dynamic capacity problem is the main source of its complexity. This article presents a system dynamics approach to model and analyse operational complexity of dynamic capacity in multi-stage production. The unique feature of this approach is that it captures the stochastic nature of three main sources of complexity associated with dynamic capacity. These are the demand, internal manufacturing delay and capacity scalability delay. The developed model was demonstrated by an industrial case study of multi-stage printed circuit board assembly line. The analysis of simulation experiments showed that ignoring complexity sources can lead to wrong decisions concerning both scaling levels and backlog management decisions. In addition, a general trade-off between the controllability and complexity of the dynamic capacity was illustrated. Finally, comparative analysis of the effect of each of these sources on the complexity level revealed that internal delay has the highest impact on dynamic capacity efficiency. Guidelines and recommendations for better capacity management and reduction of its complexity are presented.     

Planning reform beyond planning: the debate on an integrated Environment and Planning Act in the Netherlands

Land-use plans serve a dual function. On the one hand, they are programmes for future development, plans for action. On the other hand, they have a regulative function in relation to construction and land use. This paper investigates how the interplay between these functions is playing a role in the current debate about the new integrated Environment and Planning Act (Omgevingswet) in the Netherlands. Initially, the government proposed abolishing local land-use plans and replacing them with a system of by-laws. However, this proposal did not survive the debate on this bill. This paper will shed light on the relationships between planning and regulation by analysing that debate.