Abstract
Linear programming (LP) models for Supply Chain Operations Planning are widely used in Advanced Planning Systems. The solution to the LP model is a proposal for order releases to the various production units (PU) in the supply network. There is a non-linear relationship between the work-in-process in the PU and the lead time that is difficult to capture in the LP model formulation. We propose a two-step lead time anticipation (LTA) procedure where the LP model is first solved irrespective of the available production capacity and is subsequently updated with aggregate order release targets. The order release targets are generated by a local smoothing algorithm that accounts for the evolution of the stochastic workload in the PU. A solution that is both feasible with respect to the planned lead time and meets the material requirements may not exist. By means of discrete event simulation, we compare a conservative strategy where the production quantities are reduced to an optimistic strategy where the planned lead time constraint is allowed to be violated.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
Asmundsson J, Rardin RL, Uzsoy R (2006) Tractable nonlinear production planning models for semiconductor wafer fabrication facilities. IEEE Trans Semicond Manuf 19(1): 95–111
Asmundsson J, Rardin RL, Turkseven CH, Uzsoy R (2009) Production planning with resources subject to congestion. Naval Res Logist 56(2): 142–157 ISSN:1520-6750
Bertrand JWM, Wortmann JC, Wijngaard J (1990) Production control: a structural and design oriented approach. Elsevier, Amsterdam
Bitran GR, Tirupati D (1993) Hierarchical production planning. Handbooks in OR & MS, vol 4, chap 10. North-Holland, pp 523–568
Byrne MD, Bakir MA (1999) Production planning using a hybrid simulation–analytical approach. Int J Prod Econ 59(1–3): 305–311
De Kok AG (1989) A moment-iteration method for approximating the waiting-time characteristics of the gi/g/1 queue. Probab Eng Inf Sci 3: 273–287
De Kok AG (2003) Evaluation and optimization of strongly ideal assemble-to-order systems. In: Shanthikumar JG, Yao, DD, Zijm WHM (eds) Stochastic modeling and optimization of manufacturing systems and supply chains, pp 203–242
De Kok AG, Fransoo JC (2003) Planning supply chain operations: definition and comparison of planning concepts. In: Handbooks in operations research and management science, vol 11, pp 597–676. ISSN:0927-0507
Graves SC (1986) A tactical planning model for a job shop. Oper Res 34(4): 522–533
Hackman ST, Leachman RC (1986) A general framework for modeling production. Manag Sci 35(4): 478–495
Hopp WJ, Spearman ML (2011) Factory physics. Irwin McGraw-Hill
Hung YF, Hou MC (2001) A production planning approach based on iterations of linear programming optimization and flow time prediction. J Chines Inst Ind Eng 18(3): 55–67
Hung YF, Leachman RC (1996) A production planning methodology for semiconductor manufacturingbased on iterative simulation and linear programming calculations. IEEE Trans Semicond Manuf 9(2): 257–269
Hwang S, Uzsoy R (2005) A single stage multi-product dynamic lot sizing model with work in process and congestion. Technical report, Purdue University
Irdem DF, Kacar NB, Uzsoy R (2008) An experimental study of an iterative simulation-optimization algorithm for production planning. In: Proceedings of the 40th conference on winter simulation, pp 2176–2184
Karmarkar US (1989) Capacity loading and release planning with work-in-progress (WIP) and leadtimes. J Manuf Oper Manag 2: 105–123
Karmarkar US (1993) Logistics of production and inventory. In: Manufacturing lead times, order release and capacity loading, vol 4. North-Holland, pp 287–329
Kim B, Kim S (2001) Extended model for a hybrid production planning approach. Int J Prod Econ 73(2): 165–173
Kohler-Gudum C, De Kok AG (2002) A safety stock adjustment procedure to enable target service levels in simulation of generic inventory systems. Technical report, Eindhoven University of Technology
Law A (2007) Simulation modeling and analysis, 4th edn. McGraw-Hill
Meyr H, Wagner M, Rohde J (2005) Structure of advanced planning systems. Supply chain management and advanced planning, pp 109–115
Missbauer H (2002) Aggregate order release planning for time-varying demand. Int J Prod Res 40(3): 699–718
Missbauer H (2009) Models of the transient behaviour of production units to optimize the aggregate material flow. Int J Prod Econ 118(2): 387–397
Missbauer H (2010) Order release planning with clearing functions: a queueing-theoretical analysis of the clearing function concept. Int J Prod Econ (in press)
Pahl J, Voß S, Woodruff DL (2007) Production planning with load dependent lead times: an update of research. Ann Oper Res 153(1): 297–345 ISSN:0254-5330
Riano G (2002) Transient behavior of stochastic networks: application to production planning with load-dependent lead times. PhD thesis, Georgia Institute of Technology
Schneeweiss C (2003) Distributed decision making, 2nd edn. Springer, Berlin
Selçuk B (2007) Dynamic performance of hierarchical planning systems: modeling and evaluation with dynamic planned lead times. PhD thesis, Eindhoven University of Technology
Peterson R (1998) Inventory management and production planning and scheduling, 3rd edn. Wiley, New York
Simpson NC (1999) Multiple level production planning in rolling horizon assembly environments. Eur J Oper Res 114(1): 15–28 ISSN:0377-2217
Spitter JM, Hurkens CAJ, De Kok AG, Lenstra JK, Negenman EG (2004) Linear programming models with planned lead times for supply chain operations planning. Eur J Oper Res 163: 706–720
Stadtler H (2005) Supply chain management and advanced planning—basics, overview and challenges. Eur J Oper Res 163(3): 575–588
van Houtum GJ (2006) Multiechelon production/inventory systems: optimal policies, heuristics, and algorithms. Tutorial in operations research, INFORMS 2006
Vollmann TE, Berry WL, Whybark DC (1984) Manufacturing planning and control systems. Dow Jones-Irwin, Homewood
Zipkin PH (2000) Foundations of inventory management. McGraw-Hill, New York
Open Access
This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.
Author information
Authors and Affiliations
Corresponding author
Additional information
We acknowledge two anonymous referees for their comments which helped to improve this paper considerably.
Rights and permissions
Open Access This is an open access article distributed under the terms of the Creative Commons Attribution Noncommercial License (https://creativecommons.org/licenses/by-nc/2.0), which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.
About this article
Cite this article
Jansen, M.M., de Kok, T.G. & Fransoo, J.C. Lead time anticipation in Supply Chain Operations Planning. OR Spectrum 35, 251–290 (2013). https://doi.org/10.1007/s00291-011-0267-y
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00291-011-0267-y