CASE STUDY FOR LOT-SIZING PROBLEM IN MTO SUPPLY CHAIN BASED ON SIMULATION OPTIMIZATION APPROACH

Recently, manufacturers are taking a hybrid approach between MTS and MTO. However, most of literature research on production planning concentrates principally on MTS systems. The MTO area has not received the same degree of attention. There are only some research papers which are based on queueing network models that explicitly talk about the Lot Sizing Problem (LSP) in MTO sector. This paper presents a case study in MTO sector for which analytical model is still extremely complex up to now (multi-stage, multi-product, multi-location, multi-resource with setup, capacity constraints and stochastic demand). The objective is to determine a fixed optimal lot size for each manufacturing product type that will ensure Order Mean Flow Time (OMFT) target value for each finished product type. The adopted approach is carried out in three steps. A Discrete Event Simulation (DES) model was firstly implemented as a tool in estimating (OMFT) performance. Secondly, Design of Experiment is applied to conduct simulation experiments. Finally, a multiple-objective optimization is achieved by applying desirability optimization methodology. The study results illustrate that the LSP in MTO sector is viable and provides a prototype for further research in supply chain co-ordination.

[1]  F. Persson,et al.  Performance simulation of supply chain designs , 2002 .

[2]  Chrwan‐jyh Ho,et al.  Evaluating Lot‐sizing Performance in Multi‐level MRP Systems: A Comparative Analysis of Multiple Performance Measures , 1993 .

[3]  Angappa Gunasekaran,et al.  Modeling and analysis of build-to-order supply chains , 2009, Eur. J. Oper. Res..

[4]  Rajesh Piplani,et al.  Simulation workbench for analysing multi‐echelon supply chains , 2003 .

[5]  David D. Yao,et al.  A Supply Network Model with Base-Stock Control and Service Requirements , 2000, Oper. Res..

[6]  Averill M. Law,et al.  Simulation Modeling and Analysis , 1982 .

[7]  S. T. Enns,et al.  LOT-SIZING WITHIN CAPACITY-CONSTRAINED MANUFACTURING SYSTEMS USING TIME-PHASED PLANNING , 2005 .

[8]  Jwm Will Bertrand.  Multiproduct Optimal Batch Sizes with In-Process Inventories and Multi Work Centers , 1985 .

[9]  A. Maria,et al.  Simulation Optimization: Methods And Applications , 1997, Winter Simulation Conference Proceedings,.

[10]  John M. Wilson,et al.  The capacitated lot sizing problem: a review of models and algorithms , 2003 .

[11]  Russell R. Barton,et al.  Chapter 18 Metamodel-Based Simulation Optimization , 2006, Simulation.

[12]  Qing Wang,et al.  A DISCRETE EVENT MODELLING APPROACH FOR SUPPLY CHAIN SIMULATION , 2008 .

[13]  Sigrún Andradóttir,et al.  Chapter 20 An Overview of Simulation Optimization via Random Search , 2006, Simulation.

[14]  Xiaoming Liu,et al.  Cost-effective inventory control in a value-added manufacturing system , 2009, Eur. J. Oper. Res..

[15]  Özgür Yalçinkaya,et al.  Modelling and optimization of average travel time for a metro line by simulation and response surface methodology , 2009, Eur. J. Oper. Res..

[16]  Werner Jammernegg,et al.  Performance improvement of supply chain processes by coordinated inventory and capacity management , 2007 .

[17]  Ming Dong,et al.  Performance modeling and analysis of integrated logistic chains: An analytic framework , 2005, Eur. J. Oper. Res..

[18]  William T. Scherer,et al.  "The desirability function: underlying assumptions and application implications" , 1998, SMC'98 Conference Proceedings. 1998 IEEE International Conference on Systems, Man, and Cybernetics (Cat. No.98CH36218).

[19]  Ihsan Sabuncuoglu,et al.  Simulation optimization: A comprehensive review on theory and applications , 2004 .

[20]  Hector A. Rosales-Macedo.  Nonlinear Programming: Theory and Algorithms (2nd Edition) , 1993 .

[21]  N. R. Srinivasa Raghavan,et al.  Generalized queueing network analysis of integrated supply chains , 2001 .

[22]  Hing Kai Chan,et al.  Simulation modeling for comparative evaluation of supply chain management strategies , 2005 .

[23]  G. Derringer,et al.  Simultaneous Optimization of Several Response Variables , 1980 .

[24]  Chung-Yee Lee,et al.  A Dynamic Model for Inventory Lot Sizing and Outbound Shipment Scheduling at a Third-Party Warehouse , 2003, Oper. Res..

[25]  T. Williams.  Special products and uncertainty in production/inventory systems☆ , 1984 .

[26]  Mokhtar S. Bazaraa,et al.  Nonlinear Programming: Theory and Algorithms , 1993 .

[27]  B. Kingsman,et al.  Production planning systems and their applicability to make-to-order companies , 1989 .

[28]  Nico Dellaert,et al.  Production strategies for a stochastic lot-sizing problem with constant capacity , 1996 .

[29]  Francesco Longo,et al.  An advanced supply chain management tool based on modeling and simulation , 2008, Comput. Ind. Eng..

[30]  Yun Bae Kim,et al.  Supply chain simulation with discrete-continuous combined modeling , 2002 .

[31]  Loo Hay Lee,et al.  Efficient Simulation Budget Allocation for Selecting an Optimal Subset , 2008, INFORMS J. Comput..

[32]  Gerald Reiner,et al.  Customer-oriented improvement and evaluation of supply chain processes supported by simulation models , 2005 .

[33]  Hubert Missbauer,et al.  Lot sizing in workload control systems , 2002 .

[34]  S. T. Enns,et al.  Multi-product capacity-constrained lot sizing with economic objectives , 2004 .