Evaluation of safety stock methods in multilevel material requirements planning (MRP) systems

This paper evaluates alternative methods of establishing the safety stock level taking into consideration of historical measures of forecasting accuracy and the needs for master production scheduling and material requirement planning under a rolling time horizon. A computer model is used to simulate the forecasting, master production scheduling and material planning activities in a company that produces to stock and the production activities are managed by multilevel MRP systems. The simulation output is analysed to evaluate the impact of safety stock methods on MRP system performance. The result of the study shows that using safety stock can help to reduce total cost, schedule instability and improve service level in the MRP systems. Guidelines are developed to help managers select methods to determine safety stock in MRP system operations.     

Inventory management with variable lead-time dependent procurement cost

A reduction in the inventory replenishment lead-time allows reducing safety stock requirements and improving customer service. However, it might be accompanied by increased procurement costs because of premium charges imposed by suppliers, or higher transportation costs. This paper studies a single-stage variable lead-time inventory system with lead-time dependent procurement cost. Selection of the lead-time value represents finding the trade-off between benefits of lead-time reduction and increase in the procurement cost. A model for joint optimization of inventory and procurement costs is developed. Numerical studies are conducted to identify conditions under which lead-time reduction is favorable compared to procuring at the lowest cost.     

Material planning for production kits under uncertainty

A kit is a specific collection of components and/or tools needed for completing a procedure or producing a product. A multiperiod material planning system for production kits under the demand and procurement lead-time uncertainty is considered when component sharing among kits is plausible. Simulation experiments show that component sharing improves the system's service measure of average kit availability and average backorder quantity per period. Also, carrying component safety stock only enhances the benefits of component sharing by reducing the average backorder quantity at the expense of increased inventories, but does not improve the average kit availability.     

Inventory safety stocks of kanban control systems

Efficient production control systems should be flexible and lean. Pull control systems, especially kanban systems, lead to optimized organizational structures and order processes. This is due to their high transparency in practice. Up to now, their ability to adapt to dramatic changes in the order mix flexibility has been rated low. Existing kanban systems are based on non-adapting mathematical methods of buffer dimensioning and central organization. In this paper, the practical relevant methods of mathematical buffer dimensioning are described exemplarly. A new mathematical procedure is developed focusing on dynamic buffer stocks dimensioning including safety inventories. Its opportunities in practical employment are discussed. A realization of an electronic kanban system is described.     

A COMPARISON OF PRODUCTION SCHEDULING POLICIES ON COSTS,SERVICE LEVEL,AND SCHEDULE CHANGES

We consider a single product, single level, stochastic master production scheduling (Mps ) model where decisions are made under rolling planning horizons. Outcomes of interest are cost, service level, and schedule stability. The subject of this research is the Mps control system: the method used in determining the amount of stock planned for production in each time period. Typically, Mps control systems utilize a single buffer stock. Here, two Mps dual-buffer stock systems are developed and tested by simulation. We extend the data envelopment analysis (dea ) methodology to aid in the evaluation of the simulation results, where Dea serves to increase the scope of the experimental design. Results indicate that the dual-buffer control systems outperform existing policies.     

A mixed inventory model with variable lead time and random supplier capacity

In this paper, we have studied analytically the implication of a controllable lead-time and a random supplier capacity on the continuous review inventory policy, in which the order quantity, reorder point and lead-time are decision variables. Two models are considered: the normal lead-time demand and lead-time demand is distributed free. For both cases, after formulating the general model, some properties of the optimal ordering policy have been developed. Particularly, we have shown that the expected annual total cost is a unimodal function and quasi-convex in the order quantity. When the variable capacity distribution is exponential, we develop effective procedures for finding the optimal solutions. Furthermore, the effects of parameters are also performed.     

Comparing reactive Kanban and reactive CONWIP

This paper compares a reactive Kanban system to a reactive CONWIP system under conditions of unstable changes in demand using simulation experiments. After an introduction, a model of the JIT ordering systems, the Kanban and the CONWIP systems, is constructed. In order to obtain the fundamental information for developing a control rule of buffer size, the performance of the two types of the JIT ordering systems is analysed under various stable-demand conditions by simulation experiments. Based on the results, the reactive JIT ordering systems are proposed, and the performance of the proposed systems is investigated. The results showed that both of the proposed systems can react to unstable changes in demand and maintain the mean waiting time of demand at less than the required level. In the reactive Kanban system, the total of the mean work-in-process inventories becomes much less than that in the traditional Kanban system without controlling buffer size. However, in the reactive CONWIP system, the total of the mean work-in-process inventories becomes much more than or nearly equal to that in the traditional CONWIP system without controlling buffer size under the strongly correlated or the weakly correlated processing times, respectively. Based on the results, it can be claimed that, in the proposed systems, the reactive Kanban system is more effective to react to unstable changes in demand than the reactive CONWIP system.     

Production and inventory control at ABB Motors and Volvo Wheel Loaders,two examples of MRP in practical use

The paper presents the main routines of production and inventory control at ABB Motors, Västerås and Volvo Wheel Loaders, Eskilstuna. The primary interest is to present how Material Requirements Planning (MRP) is used in these two companies. If the number of end items is large, the company assembles-to-order or makes-to-order then additions to pure MRP seem to be necessary. ABB Motors and Volvo Wheel Loader use: planning bills, a normal bill of materials with 'adding bills of materials', a master production schedule planning system with an available-to-promise function and a home-made 'system' for modules available-to-promise. One important measure for the both companies is the accumulative lead-time. An increase of the Master Production Schedule in a shorter time than the accumulative lead-time is avoided, because it will lead to suggestions of purchase in past time periods and therefore most probably to future material shortages.     

Flexible reasoning using sensible agent-based systems: A case study in job flow scheduling

Planning and control systems for highly dynamic and uncertain manufacturing environments require adaptive flexibility and decision-making capabilities. Modern distributed manufacturing systems assess the utility of planning and executing solutions for both system goals (e.g. minimize manufacturing production time for all parts or minimize WIP) and local goals (e.g. expedite part A production schedule or maximize machine X utilization). Sensible Agents have the ability to alter their autonomy levels to choose among a set of decision models in order to handle the differences between local and system goals. In this paper, Sensible Agents are applied to a production planning and control problem in the context of job shop scheduling and decision model theory. Sensible Agents provide for trade-off reasoning mechanisms among system and local utilities that are flexible and responsive to an agent's abilities, situational context and position in the organizational structure of the system.     

A high-quality-supplier selection model for supply chain management and ISO 9001 system

Supplier selection process for supply chain management (SCM) and ISO 9001 quality management system environments is considered. Determining suitable suppliers in the supply chain has become a key strategic consideration. However, the nature of these decisions is usually complex and unstructured. This paper proposes a high-quality-supplier selection (HQSS) model to deal with supplier selection problems in supply chain management. In selecting a supplier, quality management factors are considered first, and then price, delivery, etc. Quality management factors include a quality management audit, product testing, engineering work force, capability index, training time, etc., based on a five-interval scale. Next, the HQSS model determines the final solution by considering factors such as price, production lead-time, and delivery time.     

考虑缓冲区库存不足情况下的设备维护与缓冲区库存联合优化研究

针对缓冲区库存不足的两设备流水线生产系统(2M1B系统)设备维护问题,提出了生产设备维护与缓冲库存联合优化模型。首先,采用指数分布描述设备故障规律,表达运行周期的总故障次数;其次,通过分析缓冲区库存量在达到额定库存后的变化,提出了利用条件概率改进库存充足和库存不足两种情况下的设备维护和缓冲库存模型,基于更新酬劳定理,以故障次数和额定库存为决策变量,以总费用为目标函数,建立缓冲区库存不足情况下的设备维护与缓冲库存联合优化模型,并且将生产系统的缺货费用集成到了总费用模型;最后,通过算例分析,计算故障次数和最优缓冲区额定库存量,进行了灵敏度分析,验证了模型有效性,丰富了考虑缓冲库存的设备理论。     

Production planning and inventory control in a company manufacturing PC parts: A case study

In this paper, we present a case study on the production planning and inventory system in a company manufacturing personal computer (PC) parts. In the case study, the targets are specified for developing a system for production planning and inventory control. The current state of the company is analysed for clarifying the points necessary to achieve the targets. Also, a system based on the analysis is proposed and its effects are estimated.     

Optimal dispatching control of an AGV in a JIT production system

This paper deals with an FMS (Flexible Manufacturing System) in a JIT (Just-In-Time) production system. The FMS consists of m workstations, one dispatching station and a single AGV (Automated Guided Vehicle). Each workstation has an input buffer of limited capacity and its processing times are distributed stochastically. When the processing of a new component starts at the workstation, a withdrawal Kanban attached to it is sent to the dispatching station. The AGV chooses one from workstations whose withdrawal Kanbans are accumulated at the dispatching station, and conveys a component with a withdrawal Kanban from the dispatching station to the workstation. The main purpose of this paper is to find an optimal dispatching policy of the AGV that maximizes the long-run expected average reward per unit time. The problem is formulated as a semi-Markov decision process and an optimal dispatching policy is computed. Numerical experiments are performed to make several comparisons.     

CIM implementation for job-shop environments

Abstract

Abstract. The small to medium-sized job-shop manufacturing industry can benefit most from the implementation of computer integrated manufacturing (CIM) technology, to meet the increasing demand for high-quality and economically priced products. The injection mould making industry is a typical representative for this group, where a manufacturer would generally produce moulds which consist of parts that are standard to every mould type or very similar. Thus, manufacturing techniques, such as group technology (GT), and production planning and control (information) management systems could make significant contributions in improving the efficiency of design and production operations.

The objective of the project, presented in this paper, was the development of a GT-based classification and coding (C/C) system for injection mould parts especially for the design and process planning phases, and the development of a production planning and shop-floor control (SFC) information management system.

An extensive investigation was carried out on existing GT-based C/C systems. This investigation, followed by a thorough examination of many injection mould parts for determining geometric similarities, led to the development of part families (classes) required for GT implementation. An OPITZ-type GT system was developed, thereafter, for the C/C of the manufactured parts of the target company.

The production planning and control software that has been developed for the target company utilizes a relational data base management system. It consists of 13 application programs, which provide a tool of organizing information for efficient production planning and SFC. The programs are designed to cover all manufacturing operations of a job from the proposal to the final testing stage. Shop orders and dispatch lists are created using this software for effective and prioritized SFC. Shop status and job status reports are generated based on feedback information received through time card entries.     

A neural network clustering model for miscellaneous components production planning

The growing importance of providing service to customers, e.g. post-sale assistance, supplying of spare parts, upgrading and integration of new elements in installed systems, enhances the importance of planning and management of upgrading parts in most manufacturing industries. These parts are generally characterized by high technical heterogeneity and have a highly variable and difficult to forecast demand. In some areas (especially the most dynamic, e.g. high-tech products), these kinds of components are quite common, and represent a very strong relation between the manufacturing firm and the market. These parts are generally too many to be efectively supported on a planning database system with individual records and too heterogeneous ( and sometimes with a too high value) to be supported all together in a single record. In this paper, we want to study the application of adaptive techniques for the clustering of these components in classes based on the similarities in their market behaviour in order to build an optimal database for planning production and supplying of these components.     

Inventory control with seasonality of lead times

The practical challenges posed by the seasonality of lead times have largely been ignored within the inventory control literature. The length of the seasons, as well as the length of the lead times during a season, may demonstrate cyclical patterns over time. This study examines whether inventory control policies that anticipate seasonal lead-time patterns can reduce costs. We design a framework for characterizing different seasonal lead-time inventory problems. Subsequently, we examine the effect of deterministic and stochastic seasonal lead times within periodic review inventory control systems. We conduct a base case analysis of a deterministic system, enabling two established and alternating lead-time lengths that remain valid through known intervals. We identify essential building blocks for developing solutions to seasonal lead-time problems. Lastly, we perform numerical experiments to evaluate the cost benefits of implementing an inventory control policy that incorporates seasonal lead-time lengths. The findings of the study indicate the potential for cost improvements. By incorporating seasonality in length of seasons and length of lead times within the season into the control models, inventory controllers can make more informed decisions when ordering their raw materials. They need smaller buffers against lead-time variations due to the cyclical nature of seasonality. Reductions in costs in our experiments range on average between 18.9 and 26.4% (depending on safety time and the probability of the occurrence of stock out). Therefore, inventory control methods that incorporate seasonality instead of applying large safety stock or safety time buffers can lead to substantial cost reductions.     

A combined optimization and agent-based approach to supply chain modelling and performance assessment

The main objective of this paper is to give an example of how expert systems techniques for distributed decision-making can be combined with contemporary numerical optimization techniques for the purposes of supply chain optimization and to describe the resulting software implementation. In this paper, multi-agent modelling techniques are applied to simulate and control a simple demand-driven supply chain network system, with the manufacturing component being optimized through mathematical programming. The system measures supply chain performance and the effect of different parameters in the replenishment control system, and can be used to simulate the behaviour of a system that uses optimization for part of its decision-making. The objective of this supply chain network system is to reduce operating cost, while maintaining a high level of customer order fulfilment.     

Studies of optimal ordering policies for perishable commodities

Abstract

Problems associated with perishable or outdating products arise in many areas of inventory and production man agement. Many commodities exist whose value does not remain constant over time during transportation, holding stock, etc. Significant work has been done to describe optimal ordering policies for items which have a fixed lifetime. In this paper, per ishable inventory models subject to stochastic procurement leadtinie both on LIFO (Last In First Out) and FIFO (First In First Out) issuing policies are considered with cither zero or 1 unit leadtinie. First, assumptions and notation used throughout the paper are given. FIFO and LIFO models are then con structed, and the existence of the optimal ordering policies and theirpropertiesare clarified. Finally, significantresults are illustrated for the relationship among inventory on hand, delay probability of procurement and optimal ordering policies.     

Coordinated Logistics: Joint Replenishment with Capacitated Transportation for a Supply Chain

In this study, we consider the integrated inventory replenishment and transportation operations in a supply chain where the orders placed by the downstream retailer are dispatched by the upstream warehouse via an in‐house fleet of limited size. We first consider the single‐item single‐echelon case where the retailer operates with a quantity based replenishment policy, (r,Q), and the warehouse is an ample supplier. We model the transportation operations as a queueing system and derive the operating characteristics of the system in exact terms. We extend this basic model to a two‐echelon supply chain where the warehouse employs a base‐stock policy. The departure process of the warehouse is characterized in distribution, which is then approximated by an Erlang arrival process by matching the first two moments for the analysis of the transportation queueing system. The operating characteristics and the expected cost rate are derived. An extension of this system to multiple retailers is also discussed. Numerical results are presented to illustrate the performance and the sensitivity of the models and the value of coordinating inventory and transportation operations.     

Annualized hours as a capacity planning tool in make-to-order or assemble-to-order environment: An agricultural implements company case

Capacity planning is one of the most important elements for an efficient production planning and control system. It is even more important when the main strategies to fulfil sales requirements are make-to-order (MTO) or assemble-to-order (ATO). Neither MTO or ATO companies keep finished products in stock which means that production level is driven by actual sales figures. Therefore, it is very important to have an available capacity as flexible as possible to meet sales requirements. Annualized hours (AH) is a work time control system that helps in increasing the flexibility of available capacity. The main rule of the AH system is to hire employees to work a certain number of hours on a yearly basis. Following some other pre-defined rules and limits, the AH system allows a company to adjust weekly available time in order to reduce idle capacity or to fulfil requirements that could mean overtime. This paper proposes a linear programming model to plan the operations using AH. This model has been implemented in a company that produces agricultural implements, showing that it is very simple to use. It is producing excellent practical results.