Possible cost reduction by applying MRP in a transformer manufacturing company of Bangladesh

Local manufacturing industries generally do not pay adequate attention towards applying the state-of-the-art operations management techniques in inventory control, scheduling, material requirements planning (MRP) etc. The main identifiable reasons are lack of exposure to the concurrent techniques and facilities, exorbitantly high price of commercially available software and inadequate indigenous support systems. Moreover, the lack of knowledge about the benefits of using MRP in various aspects hindered its wide spread diffusion. Most of the local firms assume that the procurement of raw materials either in huge quantity at a time or in small amount from period to period without adopting any mathematical approach would not have any remarkable effect on the total inventory cost. Practically the situation is different and it has been found that the procurement of material applying an established algorithm instead of current practice could significantly reduce the total incremental inventory costs. In this respect educational software was used. This paper highlights the salient features of MRP application in a local transformer manufacturing industry and makes a comparison of the total inventory costs determined by following the user-defined approach and the standard lot-sizing approaches

On-line lot-sizing with perceptrons

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Green Lot-Sizing

The lot-sizing problem concerns a manufacturer that needs to solve a production planning problem. The producer must decide at which points in time to set up a production process, and when he/she does, how much to produce. There is a trade-off bet

Dynamic lot sizing problem for a warm/cold process

We consider a dynamic lot sizing problem with finite capacity for a process that can be kept warm until the next production period at a unit variable cost ωt only if more than a threshold value has been produced and is cold, otherwise. That is, the setup cost in period t is Kt if xt-1 < Qt-1 and kt, otherwise (0 ≤ kt ≤ Kt). We develop a dynamic programming formulation of the problem, establish theoretical results on the structure of the optimal production plan and discuss its computational complexity in the presence of Wagner-Whitin-type cost structures. Based on our stuctural results, we present an optimal polynomial-time solution algorithm for kt = 0, and also show that an optimal linear-time solution algorithm exists for a special case. Our numerical study indicates that utilizing the undertime option (i.e., keeping the process warm via reduced production rates) results in significant cost savings, which has managerial implications for capacity planning and selection

The Economic Lot-Sizing Problem: New Results and Extensions

Een manier waarop bedrijven kosten kunnen reduceren is efficiënte productieplanning. Het centrale thema in dit proefschrift is een klassiek productieplanningsprobleem: het economische lot-sizing (ELS) probleem. Het doel in dit probleem is om aan de gegeven vraag voor een eindige, discrete planningshorizon te voldoen en de totale setup-, productie- en voorraadkosten te minimaliseren. We bekijken zowel aspecten rondom het klassieke probleem als uitbreidingen van het probleem. Ten eerste onderzoeken we de verhouding tussen de voorraadkosten en de setupkosten in een optimale oplossing. Vervolgens voeren we een worst-case analyse uit op een brede klasse van on-line heuristieken. Omdat het klassieke probleem relatief eenvoudig is, bekijken we ook een aantal uitbreidingen. We zijn geïnteresseerd of er efficiënte algoritmen bestaan voor deze uitbreidingen. Eerst bekijken we een integraal model waarin de vaststelling van de verkoopprijs en het maken van het productieschema simultaan plaatsvindt. We beschouwen zowel een model met een constante prijs als een model met verschillende prijzen over de tijd. Verder breiden we het ELS model uit met een mogelijkheid tot herproductie. We veronderstellen dat er een gegeven hoeveelheid producten terugkomt van de klant in elke periode. Deze producten kunnen geherproduceerd worden om aan de vraag te voldoen (naast reguliere productie). We ontwikkelen algoritmen en leiden complexiteitsresultaten af voor twee varianten van het probleem. In de ene variant zijn er gezamenlijke setupkosten voor productie en herproductie (in het geval van een gezamenlijke productielijn) en in de andere variant zijn er aparte setupkosten (in het geval van afzonderlijke productielijnen).One way for firms to reduce cost is efficient production planning. The main theme in this thesis is a classical production planning problem: the economic lot-sizing (ELS) problem. The objective of this problem is to find a production plan that satisfies the given demand for a finite, discrete planning horizon, and minimizes the total setup, production and holding costs. We study aspects of the classical problem as well as extensions of this problem. In the first part of the thesis we consider the ELS model with time-invariant costWilco van den Heuvel (1979) obtained his master’s degree in Econometrics and Operations Research with honors from Erasmus University Rotterdam in 2002. In the same year he started with his PhD research. His main interests are in Operations Research and in particular in (extensions of) the classical economic lot-sizing problem. His research resulted in five papers published in Computers & Operations Research, European Jour- nal of Operational Research, International Journal of Production Research and Operations Research Letters. Finally, in 2005 he was awarded the Chorafas Prize, a prize to stimulate young researchers

Optimization Models for Cost Efficient and Environmentally Friendly Supply Chain Management

This dissertation aims to provide models which will help companies make sustainable logistics management and transportation decisions. These models are extensions of the economic lot sizing model with the availability of multiple replenishment modes. The objective of the models is to minimize total replenishment costs and emissions. The study provides applications of these models on contemporary supply chain problems. Initially, the impact of carbon regulatory mechanisms on the replenishment decisions are analyzed for a biomass supply chain under fixed charge replenishment costs. Then, models are extended to consider multiple-setups replenishment costs for age dependent perishable products. For a cost minimization objective, solution algorithms are proposed to solve cases where one, two or multiple replenishment modes are available. Finally, using a bi-objective model, tradeoffs in costs and emissions are analyzed in a perishable product supply chain

Dynamic Lot Sizing and Scheduling in a Multi-Item Production System

In this research, algorithms are developed to address the problem of dynamic lot sizing and scheduling in a single level (or single operation) production system. This research deviates from previous research in this area in that it does not have the kind of assumptions regarding the real world production system that normally were made to reduce the complexity of the problem. Specifically, this research explicitly considers finite capacity, multiple items, known deterministic dynamic demand, sequence dependent setup times and setup costs, setup carryover and variable backlogging. The objective is to simultaneously determine the lot size and the sequence of production runs in each period to minimize the sum of setup, inventory, and backlogging costs. The research here is motivated by observations of a real world production system that has a highly automated operation with sequence dependent setup times. For problems of this kind, optimal solution algorithms do not yet exist and, therefore, heuristic solution algorithms are of interest. Two distinct approaches are proposed to address the problem. The first is a greedy approach that eliminates setups while potential savings are greater than the increase in inventory or backlogging costs incurred. The second approach solves the much easier single item problem optimally for each item and then adapts the solution to account for capacity constraints. An intelligent modification to the second approach is also tried where a overload penalty is used between successive runs of the single product optimization algorithms A common component of each approach is a dynamic programming algorithm implemented to determine the optimal sequence of production within each period and across the scheduling horizon. The addition of sequence dependent considerations introduces a traveling salesman type problem to the lot sizing and sequencing decisions. The algorithms have been tested over several combinations of demand and inventory related cost factors. Specifically the following factors at two levels each have been used: problem size, demand type, utilization, setup cost, backlogging cost, and backlogging limit. The test results indicate that, while the performance of the proposed algorithms appear to be affected by all the factors listed above, overall the regeneration algorithm with overload penalty outperforms all of the other algorithms at all factor level combinations. In summary, the contribution of this research has been the development of three new algorithms for dynamic lot sizing and scheduling of multiple items in a single level production system. Through extensive statistical analysis, it has been shown that these algorithms, in particular the regeneration algorithm with overload penalty , outperform the conventional scheduling techniques such as no lot sizing and economic manufacturing quantity

A survey of Irish electronic industries towards development of a low cost MRP system to enhance the effectiveness of their inventory control

This thesis is predominantly concerned with the study of inventory control practices within the electronics industry in Ireland. The study o f the inventory control system has been carried out under three main interrelated sections: Industrial Survey Development of an MRP Model Development of a Material Flow Simulation Model. First, an industrial survey carried out to identify the common problems and challanges related to the electronics industry sector with respect to their inventory control systems. The results o f the industrial survey representing 44 companies are presented. The survey classifies the Irish Electronics industry sector in terms of company size, product structure and MRP levels. Second, based on the industrial survey results a low cost MRP model has been developed to enhance the effectiveness of their inventory control system. The model has been solved for a variety of product structures using standard mathematical programming packages. The results obtained are compared to those of standard MRP hot sizing techniques. The third section involves the development of a material flow simulation model using the SIMAN simulation package. The model is tested under a variety of operating conditions and performance statistics collected and analysed