This research examines the effectiveness of alternative strategies for dealing with the problem of order instability, or nervousness, which occurs in Material Requirements Planning systems. Nervousness can be particularly disruptive in multi-level production processes where a change in order size or timing at one level can result in changes at other levels.
This study proposes and evaluates five different strategies for treating nervousness caused by the interaction of lot-sizing decisions and the planning horizon. Not evaluated here are the effects on order instability caused by demand uncertainty or supply and lead-time uncertainty. The five strategies examined are: 1 Freezing the schedule within the planning horizon, 2 Lot-for-Lot after stage 1, 3 Safety stocks, 4 Forecast beyond the planning horizon, and 5 Change cost procedure.
A series of simulation experiments was conducted to test the effectiveness of the five strategies on schedule stability and system costs. The experiments were constructed to evaluate the impacts of various lot-sizing methods, the length of the planning horizon, setup and holding cost parameters and product assembly structure.
The results indicate that when the source of nervousness is due to changes in decisions caused by a rolling planning horizon, safety stock and lot-for-lot approaches are not cost effective. Under most conditions, the strategies of incorporating a change cost to discourage schedule changes or freezing the schedule within the planning horizon appear to be dominant.
[1]
Joseph D. Blackburn,et al.
HEURISTIC LOT‐SIZING PERFORMANCE IN A ROLLING‐SCHEDULE ENVIRONMENT*
,
1980
.
[2]
Dean H. Kropp,et al.
THE EFFECTIVENESS OF EXTENDING THE HORIZON IN ROLLING PRODUCTION SCHEDULING
,
1982
.
[3]
L. V. Wassenhove,et al.
COST INCREASES DUE TO DEMAND UNCERTAINTY IN MRP LOT SIZING
,
1983
.
[4]
Joseph D. Blackburn,et al.
Simultaneous lot-sizing and capacity planning in multi-stage assembly processes
,
1984
.
[5]
R. C. Carlson,et al.
Less Nervous MRP Systems: A Dynamic Economic Lot-Sizing Approach
,
1979
.
[6]
Dean H. Kropp,et al.
HEURISTIC LOT‐SIZING APPROACHES FOR DEALING WITH MRP SYSTEM NERVOUSNESS
,
1983
.
[7]
Joseph D. Blackburn,et al.
The impact of a rolling schedule in a multi-level MRP system
,
1982
.
[8]
H. Albert Napier,et al.
Optimal Multi-Level Lot Sizing for Requirements Planning Systems
,
1980
.
[9]
Suresh Chand,et al.
A NOTE ON DYNAMIC LOT SIZING IN A ROLLING-HORIZON ENVIRONMENT
,
1982
.
[10]
Kenneth R. Baker,et al.
AN EXPERIMENTAL STUDY OF THE EFFECTIVENESS OF ROLLING SCHEDULES IN PRODUCTION PLANNING
,
1977
.