ISEN 315 Spring 2011 Dr. Gary Gaukler
description
Transcript of ISEN 315 Spring 2011 Dr. Gary Gaukler
![Page 1: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/1.jpg)
ISEN 315Spring 2011
Dr. Gary Gaukler
![Page 2: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/2.jpg)
Hierarchy of Planning • Forecast of aggregate demand over time horizon
• Aggregate Production Plan: determine aggregate production and workforce levels over time horizon
• Master Production Schedule: Disaggregate the aggregate plan and determine per-item production levels
• Materials Requirements Planning: Detailed schedule for production/replenishment activities
![Page 3: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/3.jpg)
Push and Pull Production Control
The inventory control methods covered so far are useful for “independent demand” situations:
Now, introduce methods to deal with “dependent demand”:
![Page 4: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/4.jpg)
Push and Pull Production Control
“Push” system: Determines when and how much to produce based on forecasts of future demands
“Pull” system: Initiates production of an item only when the item is requested
![Page 5: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/5.jpg)
1. Master production schedule2. Bill of material (BOM)3. Inventory availability4. Purchase orders outstanding5. Lead times
Effective use of dependent demand inventory models requires the following
Dependent Demand
![Page 6: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/6.jpg)
Specifies what is to be made and when MPS is established in terms of specific
products The MPS is a statement of what is to be
produced, not a forecast of demand
Master Production Schedule
![Page 7: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/7.jpg)
MPS Example
Example:
How to determine MPS?
![Page 8: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/8.jpg)
List of components, ingredients, and materials needed to make product
Provides product structure Items above given level are called parents Items below given level are called children
Bill of Materials
![Page 9: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/9.jpg)
B(2) Std. 12” Speaker kit C(3)Std. 12” Speaker kit w/
amp-booster1
E(2)E(2) F(2)
Packing box and installation kit of wire,
bolts, and screws
Std. 12” Speaker booster assembly
2
D(2)
12” Speaker
D(2)
12” Speaker
G(1)
Amp-booster
3
Product structure for “Awesome” (A)
A
Level
0
BOM Example
![Page 10: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/10.jpg)
B(2) Std. 12” Speaker kit C(3)Std. 12” Speaker kit w/
amp-booster1
E(2)E(2) F(2)
Packing box and installation kit of wire,
bolts, and screws
Std. 12” Speaker booster assembly
2
D(2)
12” Speaker
D(2)
12” Speaker
G(1)
Amp-booster
3
Product structure for “Awesome” (A)
A
Level
0Part B: 2 x number of As =
Part C: 3 x number of As =
Part D: 2 x number of Bs
+ 2 x number of Fs =
Part E: 2 x number of Bs
+ 2 x number of Cs =
Part F: 2 x number of Cs =
Part G: 1 x number of Fs =
BOM Example
![Page 11: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/11.jpg)
The time required to purchase, produce, or assemble an item For purchased items – the time between the
recognition of a need and the availability of the item for production
For production – the sum of the order, wait, move, setup, store, and run times
Lead Times
![Page 12: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/12.jpg)
| | | | | | | |
1 2 3 4 5 6 7 8Time in weeks
F
2 weeks
3 weeks
1 week
A
2 weeks
1 weekD
E
2 weeks
D
G
1 week
1 week
2 weeks to produce
B
C
E
Start production of DMust have D and E completed here so
production can begin on B
Time-phased Product Structure
![Page 13: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/13.jpg)
Starts with a production schedule for the end item – 50 units of Item A in week 8
Using the lead time for the item, determine the week in which the order should be released – a 1 week lead time means the order for 50 units should be released in week 7
This step is often called “lead time offset” or “time phasing”
Determining Gross Requirements
![Page 14: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/14.jpg)
From the BOM, every Item A requires 2 Item Bs – 100 Item Bs are required in week 7 to satisfy the order release for Item A
The lead time for the Item B is 2 weeks – release an order for 100 units of Item B in week 5
The timing and quantity for component requirements are determined by the order release of the parent(s)
Determining Gross Requirements
![Page 15: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/15.jpg)
The process continues through the entire BOM one level at a time – often called “explosion”
By processing the BOM by level, items with multiple parents are only processed once, saving time and resources and reducing confusion
Determining Gross Requirements
![Page 16: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/16.jpg)
Table 14.3
Week1 2 3 4 5 6 7 8 Lead Time
A. Required date 50Order release date 50 1 week
B. Required date 100Order release date 100 2 weeks
C. Required date 150Order release date 150 1 week
E. Required date 200 300Order release date 200 300 1 week
F. Required date 300Order release date 300 3 weeks
D. Required date 600 200Order release date 600 200 1 week
G. Required date 300Order release date 300 1 week
Gross Requirements Plan
![Page 17: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/17.jpg)
available inventory
net requirements
on hand
scheduled receipts+– =
total requirements
gross requirements allocations+
The Logic of Net Requirements
![Page 18: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/18.jpg)
Net Requirements Plan
![Page 19: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/19.jpg)
Net Requirements Plan
![Page 20: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/20.jpg)
Starts with a production schedule for the end item – 50 units of Item A in week 8
Because there are 10 Item As on hand, only 40 are actually required – (net requirement) = (gross requirement - on- hand inventory)
The planned order receipt for Item A in week 8 is 40 units – 40 = 50 - 10
Net Requirements Plan
![Page 21: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/21.jpg)
Following the lead time offset procedure, the planned order release for Item A is now 40 units in week 7
The gross requirement for Item B is now 80 units in week 7
There are 15 units of Item B on hand, so the net requirement is 65 units in week 7
A planned order receipt of 65 units in week 7 generates a planned order release of 65 units in week 5
Net Requirements Plan
![Page 22: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/22.jpg)
A planned order receipt of 65 units in week 7 generates a planned order release of 65 units in week 5
The on-hand inventory record for Item B is updated to reflect the use of the 15 items in inventory and shows no on-hand inventory in week 8
Net Requirements Plan
![Page 23: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/23.jpg)
Lot Sizing For MRP Systems
Given: Net requirements
Determine: When and how much to produce / order
![Page 24: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/24.jpg)
1 2 3 4 5 6 7 8 9 10
Gross requirements 35 30 40 0 10 40 30 0 30 55
Scheduled receipts
Projected on hand 35 35 0 0 0 0 0 0 0 0 0
Net requirements 0 30 40 0 10 40 30 0 30 55
Planned order receipts 30 40 10 40 30 30 55
Planned order releases 30 40 10 40 30 30 55
Simplest Lot Sizing: Lot-for-Lot
![Page 25: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/25.jpg)
Lot Sizing For MRP Systems
Assumptions:• Consider only one item• Demand known and deterministic• Finite horizon• No shortages• No capacity constraints
![Page 26: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/26.jpg)
Lot Sizing For MRP Systems
Problem formulation:
![Page 27: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/27.jpg)
Lot Sizing For MRP Systems
Does this look like an EOQ problem?
![Page 28: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/28.jpg)
1 2 3 4 5 6 7 8 9 10
Gross requirements 35 30 40 0 10 40 30 0 30 55
Scheduled receipts
Projected on hand 35 35 0 0 0 0 0 0 0 0 0
Net requirements 0 30 0 0 7 0 4 0 0 16
Planned order receipts 73 73 73 73
Planned order releases 73 73 73 73
Holding cost = $1/week; Setup cost = $100;
Average weekly gross requirements = 27; EOQ = 73 units
EOQ Lot Size Example
![Page 29: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/29.jpg)
How did we obtain EOQ?
![Page 30: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/30.jpg)
Lot Sizing: Silver-Meal Heuristic
In any given period, produce to cover demand in a future period as long as the average cost per period is reduced by doing so
Algorithm:1. Start in period 1. Calculate C(t): average per-period
cost if all units for next t periods produced in period 1.
2. Select lowest t such that C(t)<C(t+1): t*3. Produce t* in period 14. Repeat, starting from period t*+1
![Page 31: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/31.jpg)
Silver-Meal Example
Assume net requirements are 18, 30, 42, 5, 20Setup cost for production is $80Holding cost $2 per unit per period
![Page 32: ISEN 315 Spring 2011 Dr. Gary Gaukler](https://reader035.fdocuments.in/reader035/viewer/2022062411/56816963550346895de11ecf/html5/thumbnails/32.jpg)