Multi-Stage Production Planning
AbstractThe impact of poor production and inventory planning can be significant in any manufacturing firm. On an aggregate level, excessive inventories can lead to poor cash flows necessitating financing to cover operational costs while stock outs can lead to customer service problems and the eventual loss of business. Therefore managers must utilize their aggregate resources effectively while optimizing individual item run quantities on a daily operational level. This paper presents an analytic framework for a hierarchical treatment of a multi-stage linear programming production and inventory problem. The paper is an extension of the single stage case by the author. The problem we address is multi-item, capacitated, and linear. We require certain cost assumptions: monotone costs to determine an optimal aggregate plan and to establish planning horizons, and separability of costs to optimally disaggregate aggregate production. The hierarchical procedure not only makes business and organizational sense, but is also analytically feasible, computationally attractive, and reduces detailed forecasting requirements. The intent of the paper is twofold: first to present an alternative to the classical single monolithic model for the manager and analyst and second, to provide, for the researcher, a basis for a potentially fruitful area of research in hierarchical planning.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 25 (1979)
Issue (Month): 11 (November)
inventory/production: deterministic models; inventory/production: production smoothing; production/scheduling;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kimms, A, 1998. "Stability Measures for Rolling Schedules with Applications to Capacity Expansion Planning, Master Production Scheduling, and Lot Sizing," Omega, Elsevier, vol. 26(3), pages 355-366, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If references are entirely missing, you can add them using this form.