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Adjusting Replenishment Orders to Reflect Learning in a Material Requirements Planning Environment

Author

Listed:
  • Larry R. Dolinsky

    (Operations Management Department, Bentley College, Waltham, Massachusetts 02154-4705)

  • Thomas E. Vollmann

    (School of Management, Boston University, Boston, Massachusetts 02215)

  • Michael J. Maggard

    (College of Business Administration, Northeastern University, Boston, Massachusetts 02254)

Abstract

Some manufacturing firms, particularly in the high-technology sector, have production processes which are characterized by very low initial yields followed by steady "experience" based yield improvement. Material Requirements Planning literature reveals that MRP implementations are seldom adjusted in any systematic way to account for such yield improvement. A single product, single stage MRP model is developed which incorporates learning curve behavior into conventional MRP logic. A series of experiments systematically examine the impact on mean inventory level of various combinations of environmental conditions and managerial policies. The research demonstrates that substantial reductions in mean inventory levels can be realized in low yield environments if learning is properly included in the order release logic. This finding proves to be robust with respect to modest errors in the estimation of learning rate.

Suggested Citation

  • Larry R. Dolinsky & Thomas E. Vollmann & Michael J. Maggard, 1990. "Adjusting Replenishment Orders to Reflect Learning in a Material Requirements Planning Environment," Management Science, INFORMS, vol. 36(12), pages 1532-1547, December.
    • Handle: RePEc:inm:ormnsc:v:36:y:1990:i:12:p:1532-1547
    DOI: 10.1287/mnsc.36.12.1532
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    Citations

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    Cited by:

    1. Jaber, Mohamad Y. & Guiffrida, Alfred L., 2008. "Learning curves for imperfect production processes with reworks and process restoration interruptions," European Journal of Operational Research, Elsevier, vol. 189(1), pages 93-104, August.
    2. Jaber, M.Y. & Goyal, S.K. & Imran, M., 2008. "Economic production quantity model for items with imperfect quality subject to learning effects," International Journal of Production Economics, Elsevier, vol. 115(1), pages 143-150, September.
    3. Jaber, Mohamad Y. & Khan, Mehmood, 2010. "Managing yield by lot splitting in a serial production line with learning, rework and scrap," International Journal of Production Economics, Elsevier, vol. 124(1), pages 32-39, March.
    4. Linda Argote & Sunkee Lee & Jisoo Park, 2021. "Organizational Learning Processes and Outcomes: Major Findings and Future Research Directions," Management Science, INFORMS, vol. 67(9), pages 5399-5429, September.

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