Multilevel Production Systems with Dependent Demand with Uncertainty of Lead Times

This study considers a multilevel assembly system with several components in each sublevel. It is assumed that actual lead time for all components is probabilistic; and periodic order quantity (POQ) policy for ordering is utilized. If at a certain level a job is not received at the expected time, a delay is incurred at the delivery of production at this level and this may result in backorders of the finished product. It is assumed in this case that a fixed percentage of the shortage is backlogged and other sales are lost. In the real situation, some but not all customers will wait for backlogged components during a period of shortage, such as for fashionable commodities or high-tech products with the short product life cycle. The objective of this study is to find the planned lead time and periodicity for the total components in order to minimize the expected fixed ordering, holding, and partial backlogging costs for the finished product. In this study, it is assumed that a percentage of components at each level are scrap. A general mathematical model is suggested and the method developed can be used for optimization planned lead time and periodicity for such an MRP system under lead time uncertainties

Stochastic versus Deterministic Approach to Coordinated Supply Chain Scheduling

The purpose of this paper is to consider coordinated selection of supply portfolio and scheduling of production and distribution in supply chains under regional and local disruption risks. Unlike many papers that assume the all-or-nothing supply disruption pattern, in this paper, only the regional disruptions belong to the all-or-nothing disruption category, while for the local disruptions all disruption levels can be considered. Two biobjective decision-making models, stochastic, based on the wait-and-see approach, and deterministic, based on the expected value approach, are proposed and compared to optimize the trade-off between expected cost and expected service. The main findings indicate that the stochastic programming wait-and-see approach with its ability to handle uncertainty by probabilistic scenarios of disruption events and the much simpler expected value problem, in which the random parameters are replaced by their expected values, lead to similar expected performance of a supply chain under multilevel disruptions. However, the stochastic approach, which accounts for all potential disruption scenarios, leads to a more diversified supply portfolio that will hedge against a variety of scenarios

Monitoring of the upstream part of a supply chain dedicated to the customized mass production with a revisited version of MRP

This article focuses on the monitoring of a supply chain dedicated to the mass production of strongly diversi-fied products. Specifically, we are interested in the part of this chain that contributes to the production of a set of alter-native modules assembled on a work station of one or several assembly lines, whose production levels are stable. The MRP approach is adopted for the monitoring of this chain. The distance between the production units leads to a mix between production to stock and production to order. In this article, we establish the relations that allow us to define, in a steady state, the quantities to produce that address the requirements of the Master Production Schedule and that are partially or completely random to limit the stockout risk to a very low predeter

The consequences of time-phased order releases on two M/M/1 queues in series.

A key characteristic of MRP applications includes the coordination of assembly and purchased component requirements by time-phased order releases. In the literature on order review and release strategies, time- phased order releases are described as a worthy alternative to load limited release mechanisms. This paper initializes the development of a stochastic model that quantifies the consequences of time-phased order releases on the stochastic system behavior. This is done by introducing them in an open queueing network composed of two M/M/1 stations. The core of the analysis is focused on the modified flow variability which is specified by the second-order stationary departure process at the first station in the routing. It is a process characterized by a negligible autocorrelation. Based on the stationary-interval method and the asymptotic method, we propose an approximating renewal process for the modified departure process. The modelling efforts provide interesting conclusions and practical insights on some coordination issues in stochastic multi-echelon systems.

Demand uncertainty and lot sizing in manufacturing systems: the effects of forecasting errors and mis-specification

This paper proposes a methodology for examining the effect of demand uncertainty and forecast error on lot sizing methods, unit costs and customer service levels in MRP type manufacturing systems. A number of cost structures were considered which depend on the expected time between orders. A simple two-level MRP system where the product is manufactured for stock was then simulated. Stochastic demand for the final product was generated by two commonly occurring processes and with different variances. Various lot sizing rules were then used to determine the amount of product made and the amount of materials bought in. The results confirm earlier research that the behaviour of lot sizing rules is quite different when there is uncertainty in demand compared to the situation of perfect foresight of demand. The best lot sizing rules for the deterministic situation are the worst whenever there is uncertainty in demand. In addition the choice of lot sizing rule between ‘good’ rules such as the EOQ turns out to be relatively less important in reducing unit cost compared to improving forecasting accuracy whatever the cost structure. The effect of demand uncertainty on unit cost for a given service level increases exponentially as the uncertainty in the demand data increases. The paper also shows how the value of improved forecasting can be analysed by examining the effects of different sizes of forecast error in addition to demand uncertainty. In those manufacturing problems with high forecast error variance, improved forecast accuracy should lead to substantial percentage improvements in unit costs

A Stackelberg game theoretic model for optimizing product family architecting with supply chain consideration

Planning of an optimal product family architecture (PFA) plays a critical role in defining an organization's product platforms for product variant configuration while leveraging commonality and variety. The focus of PFA planning has been traditionally limited to the product design stage, yet with limited consideration of the downstream supply chain-related issues. Decisions of supply chain configuration have a profound impact on not only the end cost of product family fulfillment, but also how to design the architecture of module configuration within a product family. It is imperative for product family architecting to be optimized in conjunction with supply chain configuration decisions. This paper formulates joint optimization of PFA planning and supply chain configuration as a Stackelberg game. A nonlinear, mixed integer bilevel programming model is developed to deal with the leader–follower game decisions between product family architecting and supply chain configuration. The PFA decision making is represented as an upper-level optimization problem for optimal selection of the base modules and compound modules. A lower-level optimization problem copes with supply chain decisions in accordance with the upper-level decisions of product variant configuration. Consistent with the bilevel optimization model, a nested genetic algorithm is developed to derive near optimal solutions for PFA and the corresponding supply chain network. A case study of joint PFA and supply chain decisions for power transformers is reported to demonstrate the feasibility and potential of the proposed Stackelberg game theoretic joint optimization of PFA and supply chain decisions

Safety Times for Multistage Assembly System

Nowadays, a wide class of problems can be solved by using the classical newsboy model. However, in problems where uncertainty of events and randomness are omnipresent, there is a necessity to adapt the existing solutions and/or find new extensions that will properly answer all requirements. This paper considers a multistage assembly system where interrelated assembly operations with independent stochastic operation times should be planned in an optimal way. Delivery of items in a requested time implies that either delay costs or holding costs appear. The goal is to find optimal safety times. We propose an approximate technique based on successive application of the solution of simpler one-stage problem. The generalized mathematical model suggested is built up on the relaxed hypothesis and can be used in multistage assembly networks. The existence and uniqueness of the solution are proven. The preliminary tests are performed and our approximate technique is compared to exact results

Operations planning test bed under rolling horizons, multiproduct,multiechelon, multiprocess for capacitated production planning modelling with strokes

[EN] One of the problems when conducting research in mathematical programming models for operations planning is having an adequate database of experiments that can be used to verify advances and developments with enough factors to understand different consequences. This paper presents a test bed generator and instances database for a rolling horizons analysis for multiechelon planning, multiproduct with alternatives processes, multistroke, multicapacity with different stochastic demand patterns to be used with a stroke-like bill of materials considering production costs, setup, storage and delays for operations management. From the analysis of the operations planning obtained from this test bed, it is concluded that a product structure with an alternative process obtains the lowest total cost and the highest service level. In addition, decreasing seasonal demand could present a lower total cost than constant demand, but would generate a worse service level. 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A rolling horizon simulation approach for managing demand with lead time variability

[EN] This paper proposes a rolling horizon (RH) approach to deal with management problems under dynamic demand in planning horizons with variable lead times using system dynamics (SD) simulation. Thus, the nature of dynamic RH solutions entails no inconveniences to contemplate planning horizons with unpredictable demands. This is mainly because information is periodically updated and replanning is done in time. Therefore, inventory and logistic costs may be lower. For the first time, an RH is applied for demand management with variable lead times along with SD simulation models, which allowed the use of lot-sizing techniques to be evaluated (Wagner-Whitin and Silver-Meal). The basic scenario is based on a real-world example from an automotive single-level SC composed of a first-tier supplier and a car assembler that contemplates uncertain demands while planning the RH and 216 subscenarios by modifying constant and variable lead times, holding costs and order costs, combined with lot-sizing techniques. Twenty-eight more replications comprising 504 new subscenarios with variable lead times are generated to represent a relative variation coefficient of the initial demand. We conclude that our RH simulation approach, along with lot-sizing techniques, can generate more sustainable planning results in total costs, fill rates and bullwhip effect terms.This work was supported by the European Commission Horizon 2020 project Diverfarming [grant number 728003].Campuzano Bolarin, F.; Mula, J.; Díaz-Madroñero Boluda, FM.; Legaz-Aparicio, Á. (2020). A rolling horizon simulation approach for managing demand with lead time variability. 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OR Spectrum, 31(1). doi:10.1007/s00291-007-0086-3Brown, M. E., & Kshirsagar, V. (2015). Weather and international price shocks on food prices in the developing world. Global Environmental Change, 35, 31-40. doi:10.1016/j.gloenvcha.2015.08.003Campuzano, F., Mula, J., & Peidro, D. (2010). Fuzzy estimations and system dynamics for improving supply chains. Fuzzy Sets and Systems, 161(11), 1530-1542. doi:10.1016/j.fss.2009.12.002Campuzano-Bolarín, F., Mula, J., & Peidro, D. (2013). An extension to fuzzy estimations and system dynamics for improving supply chains. International Journal of Production Research, 51(10), 3156-3166. doi:10.1080/00207543.2012.760854De Sampaio, R. J. B., Wollmann, R. R. G., & Vieira, P. F. G. (2017). A flexible production planning for rolling-horizons. International Journal of Production Economics, 190, 31-36. doi:10.1016/j.ijpe.2017.01.003Díaz-Madroñero, M., Mula, J., & Jiménez, M. (2014). Fuzzy goal programming for material requirements planning under uncertainty and integrity conditions. International Journal of Production Research, 52(23), 6971-6988. doi:10.1080/00207543.2014.920115Díaz-Madroñero, M., Mula, J., & Peidro, D. (2017). A mathematical programming model for integrating production and procurement transport decisions. Applied Mathematical Modelling, 52, 527-543. doi:10.1016/j.apm.2017.08.009Disney, S. M., Naim, M. M., & Potter, A. (2004). Assessing the impact of e-business on supply chain dynamics. International Journal of Production Economics, 89(2), 109-118. doi:10.1016/s0925-5273(02)00464-4Dominguez, R., Cannella, S., & Framinan, J. M. (2015). The impact of the supply chain structure on bullwhip effect. Applied Mathematical Modelling, 39(23-24), 7309-7325. doi:10.1016/j.apm.2015.03.012Fransoo, J. C., & Wouters, M. J. F. (2000). Measuring the bullwhip effect in the supply chain. Supply Chain Management: An International Journal, 5(2), 78-89. doi:10.1108/13598540010319993Geary, S., Disney, S. M., & Towill, D. R. (2006). On bullwhip in supply chains—historical review, present practice and expected future impact. International Journal of Production Economics, 101(1), 2-18. doi:10.1016/j.ijpe.2005.05.009Giard, V., & Sali, M. (2013). The bullwhip effect in supply chains: a study of contingent and incomplete literature. International Journal of Production Research, 51(13), 3880-3893. doi:10.1080/00207543.2012.754552Hosoda, T., & Disney, S. M. (2018). A unified theory of the dynamics of closed-loop supply chains. European Journal of Operational Research, 269(1), 313-326. doi:10.1016/j.ejor.2017.07.020Hussain, M., & Drake, P. R. (2011). Analysis of the bullwhip effect with order batching in multi‐echelon supply chains. International Journal of Physical Distribution & Logistics Management, 41(10), 972-990. doi:10.1108/09600031111185248Jakšič, M., & Rusjan, B. (2008). The effect of replenishment policies on the bullwhip effect: A transfer function approach. European Journal of Operational Research, 184(3), 946-961. doi:10.1016/j.ejor.2006.12.018Karimi, B., Fatemi Ghomi, S. M. T., & Wilson, J. M. (2003). The capacitated lot sizing problem: a review of models and algorithms. Omega, 31(5), 365-378. doi:10.1016/s0305-0483(03)00059-8Li, J., Ghadge, A., & Tiwari, M. K. (2016). Impact of replenishment strategies on supply chain performance under e-shopping scenario. Computers & Industrial Engineering, 102, 78-87. doi:10.1016/j.cie.2016.10.005Lian, Z., Liu, L., & Zhu, S. X. (2010). Rolling-horizon replenishment: Policies and performance analysis. Naval Research Logistics (NRL), 57(6), 489-502. doi:10.1002/nav.20416D. Mendoza, J., Mula, J., & Campuzano-Bolarin, F. (2014). Using systems dynamics to evaluate the tradeoff among supply chain aggregate production planning policies. 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