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 Computerized Scheduling Model for Analyzing Cook Freeze Food Production Plans

Costs of food service system resources are steadily increasing, with labor being cited as the most costly resource. A management tool is needed in the food service industry toschedule production personnel and equipment to minimize forced delay time and decrease total labor costs. Material requirements planning was adapted to generate production data for two nine-day menu cycles in a hypothetical cook freeze production system. Data for the total production plan; master food product schedule, a record of specific entree requirements by time period; and bill of materials, consisting of a standardized formula, list of production activities, and an arrow-on-node flow diagram of the preparation process for each entree, were obtained from a hypothetical food production system serving 1,000 meals for noon and supper as defined by Beach (1974). Three categories of labor: cook, assistant cook, and food service worker, and eight major kinds of equipment were utilized to produce the 42 different entrees. Ten hours were available for scheduling necessary production activities. One seven-day and three five-day production plans, an original and two alternatives, were developed from the master production schedule, a summary of master food product schedules. The five-day production plan--Alternative 1 was used as a basis for a production system employing one labor category. The COST-ARREST program was used to generate daily production sheets for one week for each of the four production plans. Labor time requirements, forced delay time, and labor cost were analyzed for each of the production plans. Results showed that the five-day production plan--Alternative 2 minimized the day-to-day fluctuation in labor time requirements. Overtime was minimized when one labor category was utilized with four production cooks. Total forced delay time was less in the five-day production plans than in the seven-day production plan. The lowest percentage of forced delay time and lowest labor cost occurred when one labor category was employed with three production cooks. Comparison of total production duration time needed to complete work activities revealed that more time was required to prepare entree items in the seven-day production plan than in the five-day plans. Total daily labor demand varied by as much as 24 hours in the five-day production plan--Original. Flexibility in the scheduling of entree items within the week allowed a balancing of labor demand. Labor utilization was limited by job descriptions as supported by analysis of overtime, forced delay and labor cost. Implementation of a flexitime plan could decrease the amount of overtime if employees could adjust work schedules to handle fluctuating work loads. The sequencing of activities influenced production duration. Daily labor requirements increased in all production plans by approximately 40% to reflect forced delay time. Material requirements planning, coupled with the COST-ARREST technique, could provide food service managers with relevant, accurate, and timely data for a feasible and effective method of allocating and scheduling resources

Standardization and program effect analysis (Study 2.4). Volume 3: Design-to-cost analysis

The program procedures that were incorporated into an on-going "design-to-cost" spacecraft program are examined. Program procedures are the activities that support the development and operations of the flight unit: contract management, documents, integration meetings, engineering, and testing. This report is limited to the program procedures that were implemented, with emphasis on areas that may depart from normal satellite development practices

Development of a Transportation Network Model for Complex Economic and Infrastructure Simulations

The intent of this effort is to add a transport network to an agent-based economic simulation model, thereby increasing the fidelity of the economic results reported. The majority of existing agent-based work regarding transportation infrastructures deals with traffic management and urban planning. However, little work has been done in modeling the transport system as a basic infrastructure dependency for an agent-based representation of the economy. In an agent-based modeling environment the transportation component derives its demand from the activities of the agents as they buy and sell goods which require transportation services. The Network Shipper agent was added to allow transportation based on the existing U.S. interstate highway system. The agent determines the shortest path between a buyer and seller and estimates a time of arrival. To represent the dynamic nature of a highway system capacity and speed constraints are imposed on the network. The transportation network was then tested using data for the US milk supply chain. The strongest result of this work is the demonstration that inventory levels in a supply chain must buffer the delivery time uncertainty created when rigorous pursuit of minimum cost supply creates chum in the set of preferred suppliers for a firm. The current geographic distribution of supply and demand, along with variations in the effective time-dependent throughput capacity of the transportation network across the country, creates differential regional sensitivities. In particular, the North Atlantic region is most susceptible to this condition, and as a consequence experiences almost twice the price fluctuation of the South Atlantic region for cheese, despite having half the average supply distance of the south

The Use of Capacity and Inventory in a Rate-Based Planning and Scheduling System to Achieve Strategic Goals in Industrial Applications

In pull or lean manufacturing, the final production schedule is in the form of takt time (drumbeat). All internal and external suppliers are driven by pull signals to feed the production rate. However, variability can be a problem for this drumbeat as the plan should not change more than the ability of the suppliers’ capability to respond. The supply chain should have sufficient flexibility to react quickly to changes in demand, while minimizing week-to-week production variability. Current planning and scheduling systems do not produce a plan that minimizes fluctuations. If the schedule is frozen for several periods, they are slow to react to changes in demand, which eventually produces many changes in production and inventory (the bullwhip effect). When these systems do not freeze the schedule, variation in the forecast and demand yield nervousness, making the planning difficult. Rate-Based Planning and Scheduling (RPBS) has been proposed as an alternative to current scheduling techniques. But for the most part, it has remained a concept rather than a method that can be implemented. The philosophy behind RBPS is to allow flexibility to adjust the schedule gradually for the near future, and more for periods farther into the future. If flexibility boundaries are defined strategically, the manufacturer will have the ability to respond to changes in demand, yet the schedule will be smooth and long term forecasts for the production rate will anticipate requirements from external suppliers. This dissertation consolidates previous material on RBPS for the first time. In addition, it introduces two algorithms (Retailer Smoothing and Production Smoothing) for RBPS. The Production Smoothing technique focuses on leveling production. Whereas, the Retailer Smoothing model allows the customer to create forecasted orders and then limits how much these orders may change. Through statistical experiments and simulations, the impact of the factors such as the standard deviation of demand, the length of the planning period, and the amount of flexibility in the plan are investigated. Irrelevant factors were eliminated as data from further simulations were compiled into tables. The goal of the tables is to allow practitioners to use one of the RBPS strategies with the appropriate levels of the RBPS factors by weighing the impact of capacity and inventory. For the Retailer Smoothing technique, the closer production follows demand and the shorter the flex fences, less inventory is needed as production will shift more. But as demand varies more, production changes and inventory level will increase significantly. On the other hand, Production Smoothing minimizes production changes by constraining flexibility and lengthening the planning period. This will, in turn, increase inventory. Also, as companies update their plan more frequently, more variation is added to the system which will vastly increase the inventory needed to buffer the production swings

Alternative project delivery in rural Alaska: experiences, quality and claims

Master's Project (M.S.) University of Alaska Fairbanks, 2015The popularity of alternative project delivery systems has expanded beyond the private sector and into the public sector. Alaska embodies unique challenges that may present obstacles while using alternative project delivery systems. This analysis will provide an understanding of alternative project delivery systems in Alaska and how local experiences, quality and claims are affected. Alaska's unique characteristics present both challenges and opportunities for implementing alternative project delivery systems. This report begins with a discussion of experiences from several rural Alaska projects, and how alternative project delivery systems can be utilized. Some impacts that alternative project delivery systems have on quality are then presented, including a perspective on quality and recommendations for achieving customer satisfaction. A treatment of construction claims is then provided, followed by conclusions and recommendations for stakeholders in selecting an appropriate project delivery system. Alternative project delivery systems were researched by means of scholarly literature reviews, professional interviews and seminars. The report of these findings is intended to provide owners and contractors with a concise presentation of the challenges and advantages for using alternative project delivery systems in Alaska

An Investigation to the Main Components of the Project Study Phase Deliverables and an In-depth Review into the Industry's Schedule Development Practices

One of the key causes of project’s productivity issues is insufficient attention to the project ‘study phase’. In certain developing countries, standard processes do not exist that define the project study phase components and usually project management defines its own (often non-structured) approach to manage the project. The driver for this research is to provide a recommended set of deliverables that can support construction companies to prepare standard procedures at the project study phase

Design requirements for SRB production control system. Volume 5: Appendices

A questionnaire to be used to screen potential candidate production control software packages is presented

Business system improvements through recognition of process variability

Thesis (M.S.)--Massachusetts Institute of Technology, Sloan School of Management, 1997, and Thesis (M.S.)--Massachusetts Institute of Technology, Dept. of Chemical Engineering, 1997.Includes bibliographical references (p. 121).by Michael P. Miller.M.S