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Production Management
101
Production Management
102
Rough-Cut
Capacity
End-Item
Demand
Estimate
Master
Production
Schedule
(MPS)
Detailed
Capacity
Planning
Material
Requirements
Planning
(MRP)
Material
Plan
Purchasing
Plan
Shop Floor
Control
Shop
Orders
Updates
Production Management
103
Production Management
104
Production Management
105
Production Management
106
1
1000
1500
600
3100
Jan
Week
2
3
1000
1000
500
500
1500
1500
600
3000
3600
12200
4
1000
1500
2500
Production Management
5
2000
350
1000
3350
Feb
Week
6
7
2000
2000
300
2300
12200
1000
200
3200
8
2000
350
1000
3350
107
1
1000
1200
Jan
Week
2
3
1000
1000
800
300
4
1000
200
Production Management
5
2000
100
Feb
Week
6
7
2000
2000
8
2000
108
0, if I t > 0
Qt =
2500, otherwise
I1 = max{0, 1600} max{1000, 1200} = 400 >0
I2 = max{0, 400} max{1000, 800} = -600 <0 => Q2 = 2500
I2 = 2500 + 400 max{1000, 800} = 1900, etc.
MPS
Jan
Feb
Week
Week
Current Inventory =
1600
1
2
3
4
5
6
7
forecast Ft
1000
1000
1000
1000
2000
2000
2000
orders Ot
1200
800
300
200
100
Inventory It
1600
400
1900
900
2400
400
900
1400
MPS Qt
2500
2500
2500
2500
ATP
400
1400
2200
2500
2500
Production Management
8
2000
1900
2500
2500
109
Lot-for-Lot production
MPS
Current Inventory =
1600
forecast Ft
orders Ot
Inventory It
1600
MPS Qt
ATP
1
1000
1200
400
0
400
Jan
Week
2
3
1000
1000
800
300
0
0
600
1000
0
700
4
1000
200
0
1000
800
Production Management
5
2000
100
0
2000
1900
Feb
Week
6
7
2000
2000
8
2000
0
2000
2000
0
2000
2000
0
2000
2000
110
Production Management
111
Make-To-Stock-Modeling
Qit = production quantity of product i in period t
Iit = Inventory of product i at end of period t
Dit = demand (requirements) for product i in time period t
a i = production hours per unit of product i
h i = inventory holding cost per unit of product i per time period
A i = set-up cost for product i
G t = production hours available in period t
yit = 1,if set-up for product i occurs in period t (Qit > 0)
Production Management
112
min ( Ai yit + hi I it )
i =1 t =1
I i ,t -1 + Qit I it = Dit
n
a Q
i =1
it
Gt
k =1
113
Production Management
114
Decision Variables:
Ikt = inventory of module k at the end of period t
yjt = 1, if order j is assembled and delivered in period t; 0, otherwise
hk = holding cost
jt = penalty costs, if order j is satisfied in period t and order j is due in
period t (t<t); holding costs if t > t
Production Management
115
min hk I kt + jt y jt
k =1 t =1
j =1 t =1
subject to
n
I kt = I k ,t 1 + Qkt g kj y jt
j =1
a
j =1
y jt Gt
y
t =1
jt
for all t
=1
I kt 0;
for all j
y jt {0,1}
Production Management
Production Management
117
A
B
C
D
1
1000
1500
600
January
Week
2
3
1000
1000
500
500
1500
1500
600
4
1000
1500
-
1
Assembly
Inspection
1133
107
2
1083
104
3
1333!!
128!!
weekly capacity
requirements?
Assembly: 1000*20 +
1500*22 + 600*25 = 68000
min = 1133,33 hr
Inspection: 1000*2 + 1500*2
+ 600*2,4 = 6440 min =
107,33 hr etc.
available capacity per week
is 1200 hr for the assembly
work center and 110 hours
for the inspection station;
Available
capacity
4 per week
883
1200
83
110
Production Management
118
Production Management
119
product
A
B
1
100
40
product
A
B
work on
critical machine
1
4
3
120
60
4
100
-
5
120
40
6
60
-
work on
non-critical machine
2
2
Total
3
6
120
Production Management
121
week
4
40
60
200
5
48
72
240
6
24
36
120
week
4
-
5
64
96
80
6
-
Production Management
122
a
b
other
week
3
4
104
156
280
32
48
160
144
216
360
40
60
200
Production Management
112
168
320
24
36
120
123
capacity requirements
a (max 80)
200
b (max 120)
other (max 300)
100
0
1
week
Production Management
124
Production Management
125
Production Management
126
1
36
20
30
2
36
30
30
Period
3
36
60
36
10
24
12
16
30
30
60
44
48
52
0,83
0,83
1,67
1,22
1,33
1,44
G (hr/week)
Rt (hours)
Qt (hours)
Ut (hours)
W t (hours)
Lt(weeks)
Production Management
4
36
20
36
5
36
40
36
6
36
40
36
127
Production Management
128
End-Item 1
Legend:
S/A
Level 1
S/A = subassembly
1
Level 2
PP 10
1
RM = raw material
2
MP 9
Level 4 RM 12
MP = manufactured part
S/A
PP 5
4
Level 3
PP = purchased part
part #
quantity
RM 13
2
Production Management
129
netting
Net requirements = Gross requirements - on hand inventory - quantity on
order
done at each level prior to further explosion
offsetting
the timing of order release is determined
lotsizing
batch size is determined
Production Management
130
Telephone
Hand Set 11
Assembly
Base
12
Assembly
1
Housing
S/A
Microphone 111
S/A
1
Receiver
S/A
Tapping
Screw
112
115
Hand
Set Cord
1
121
Board Pack 122
S/A
Rubber
Pad
1
Upper
Cover
113
Lower
Cover
123
Tapping
Screw
4
114
13
Key
Pad
Production Management 1
1211
Key
Pad Cord
1212
131
124
gross
requirements
scheduled
receipts
projected
inventory
balance
net
requirements
1200
600
1000
400
700
200
1600
1700
900
week
4
1000
2000
2000
2000
2000
100
2000
2000
2000
2000
planned receipts
planned order
release
Production Management
132
current
gross
requirements
scheduled
receipts
projected inventory
balance
net requirements
planned receipts
planned order
release
1200
600
1000
400
700
200
1600
1700
900
3000
week
4
1000
2000
2000
2000
2000
2900
100
3000
900
2000
1900
2000
3000
2900
2000
3000
900
2000
3000
3000
Production Management
133
part number
12
121
123
1211
description
Qty
base assembly
housing S/A
rubber pad
key pad
1
1
4
1
Production Management
134
Part 12
gross requirements
scheduled receipts
projected inventory balance
net requirements
planned receipts
planned order release
current
Part 121
gross requirements
scheduled receipts
projected inventory balance
net requirements
planned receipts
planned order release
current
0
800
1
400
1200
0
0
0
2
600
400
1000
0
0
0
2
0
3
1000
400
400
0
0
3000
x1
0
3
3000
4
1000
5
2000
6
2000
7
2000
8
2000
2400
0
3000
0
400
0
0
3000
1400
0
3000
3000
2400
0
3000
0
400
0
0
0
x1
4
0
5
3000
0
0
0
3000
0
0
3000
3000
x4
500
Part 123
gross requirements
scheduled receipts
projected inventory balance
net requirements
planned receipts
planned order release
current
0
Part 1211
gross requirements
scheduled receipts
projected inventory balance
net requirements
planned receipts
planned order release
current
0
15000
1200
500
0
0
0
1
500
0
0
2500
x1
2
0
15000
0
0
0
1
0
1500
2700
0
0
0
0
10000
25000
0
0
0
2
2500
200
0
0
0
0
0
2500
0
x1
x1
x1
6
3000
x4
0
0
3000
0
3
12000
4
0
5
12000
6
12000
13000
0
0
0
13000
0
0
0
1000
0
0
11000
0
0
11000
0
5
3000
4
3000
200
0
0
2800
0
0
2800
3000
0
0
3000
0
Production Management
x4
0
0
0
0
0
0
0
0
8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
135
Product
A
B
C
D
5
2000
350
1000
-
February
Week
6
7
2000
2000
1000
300
200
8
2000
350
1000
-
Production Management
136
combining requirements:
process of obtaining the gross requirements of a common item
pegging:
identify the items end product
useful when item shortages occur
Production Management
137
Production Management
138
label of each item in BOM (assumed that all labels are sorted with
respect to the production level starting from the end-items)
period t
resource m
Parameters:
(i)
-1(i)
si
cij
hi
ami
bmi
Lmt
ocm
G
Dit
139
Equations:
P T
T M
i =1t =1
t =1m=1
j ( i )
ij
x jt Dit
i =1
i, t
xit Gy it 0 i, t
m, t
xit , I it , Omt 0,
yit {0,1}
i, m, t
Production Management
140
Production Management
141
L ( z ) = ( y z ) ( y ) dy =
z
(1 )Q
142
.00
.02
.04
.3989
.3509
.3069
.2668
.2304
.1978
.1687
.1429
.1202
.1004
.0833
.0686
.0561
.0456
.0367
.0293
.0233
.0183
.0143
.0110
.0084
.0063
.0047
.0036
.0027
.0021
.3890
.3793
.3418
.3329
.2986
.2904
.2592
.2518
.2236
.2170
.1917
.1857
.1633
.1580
.1381
.1335
.1160
.1120
.0968
.0933
.0802
.0772
.0660
.0634
.0539
.0517
.0437
.0418
.0351
.0336
.0280
.0268
.0222
.0212
.0174
.0166
0..0136
.0129
.0104
.0099
.0080
.0075
.0060
.0056
.0044
.0042
.0034
.0032
.0026
.0024
.0018
.0017
Production Management
.06
.08
.3697
.3240
.2824
.2445
.2104
.1799
.1528
.1289
.1080
.0899
.0742
.0609
.0496
.0401
.0321
.0256
.0202
.0158
.0122
.0094
.0071
.0053
.0039
.0030
.0023
.0016
.3602
.3154
.2745
.2374
.2040
.1742
.1478
.1245
.1042
.0866
.0714
.0585
.0475
.0383
.0307
.0244
.0192
.0150
.0116
.0089
.0067
.0050
.0037
.0028
.0022
.0016
143
Safety stock:
Reorder point:
R = D + z
Order quantity:
Q = EOQ
2AD
ic
I (1) =
1
2
for n stocking
points
2A D
+ z
ic
Production Management
144
Production Management
145
I (2) = 2
(Q / 2 + s ) = 2 (Q / 2 + s ) = 2 I (1)
2
I (n) = n I (1)
for each level the safety stock is : s/ n
the total safety stock is n s
Production Management
146
Level 0
Level 1
Sugar
Cartons
147
2 AD
=
ic
Q =
2 x 50 x 800
= 10 tons
800
I (1) =
Q
10
+s=
+ 2,51 = 7 ,51tons
2
2
I (2) =
2 I (1) = 10 , 62 tons
s
2,51
=
= 1,77tons
2
2
Production Management
148
Production Management
149
Production Management
150
Production Management
151
Production Management
152
I 10 = 18 , I 20 = 38 , R 1e = 20 , R 2e = 34 , Q 1 = 10 , Q 2 = 30
D = 2 (Item 1), 1 = 1, 2 = 2
Production Management
153
Item 1
Item 2
Period
Demand
Level w1
Production
Level w2
Production
1
2
18
10
10
0
2
2
26
0
10
0
3
2
24
0
10
30
4
2
22
0
10
0
5
2
20
10
30
0
6
2
25
10
30
0
Production Management
6
2
28
0
10
0
7
2
23
0
30
0
154
Production Management
155
L = lead time
( / ) 2 + 2 2 1
+
L=
2 (1 / )
156
j =1
( S j + t jQ j )
j
n
j=1
j =1
( S j + t jQ j ) 2
n
j =1
Production Management
157
Production Management
158
Material Planning
Work to do: 7.7ab, 7.8, 7.10, 7.11, 7.14 (additional information:
available hours: 225 (Paint), 130 (Mast), 100 (Rope)), 7.15, 7.16,
7.17, 7.31-7.34
Production Management
159