production management (1): How to conceptualize production systems Outline of production management (2): Framework of production planning and control Inventory control and management (1): Economic order quantity (EOQ) and the role of safety stock Inventory control and management (2): Conventional inventory control models Production planning and linear programming MRP (1): Bill of materials (BOM), priority planning, capacity planning, etc. MRP (2): Lot sizing and dynamic order quantity (DOQ)
(or at least several) components (parts or units). • To obtain the products, we first need to produce those components, and then assemble them up to the products. • Further, each component may be produced through several operations to be carried out on different machines. • Thus, not only the production plan for (assembling) the final products, but also that for (producing) each component will be necessary. Hierarchical production planning Necessity of Hierarchical Planning
parts, etc., demand on which is determined exogenously, for example, by the market Items of dependent demand Parts, materials, tools, etc., demand on which is derived endogenously, for example, from that on higher hierarchy items The production plan for the latter can be derived from that of the former. Independent and Dependent Demand
continuous time into segments of an appropriate length, for example, a week, a day, etc. Time bucket Each time segment generated by time phasing Lead-times (including appropriate margin) are rounded up in this units. Time Phasing Time
where and when? Production capacity (humans and machines) Planning Priority planning Capacity planning Control Priority control Capacity control Functions of MRP System MRP I (Material requirements planning) ⇒ MRP II (Manufacturing resource planning)
each item per period Net requirement for each item per period Completion schedule for each item Order release schedule for each item Bill of materials (BOM) Levels of inventory and backorder Lot sizing rules Production lead-times Priority Planning Lower hierarchy items
item Work center schedule for each item Overall workload at each work center Overcapacity? Execution Processing route and lead-time of each item yes no Priority planning Load for each item at each work center Standard load (person-hours, machine-hours) at each work center
lot size Lead -time P 20 1 1 period U 30 1 2 periods A 50 30 1 period B 30 30 2 periods Product P Unit U Part A Part A Part B Bill of materials (BOM) (1) (1) (2) (2) ← How many items are required? Order volume must be a multiple of this value. Period 1 2 3 4 5 6 7 Demand ― ― 15 30 15 10 20 Demand quantities for P • Summarized BOM • Structured BOM