Management Science · 1979 · 134 citations · 3 references
EngineeringLogistics OptimizationIndustrial EngineeringSmart ManufacturingInventory HoldingInventory TheoryOperations ResearchCost EngineeringEconomic AnalysisSystems EngineeringLogisticsNervous Mrp SystemsNeurologyQuantitative ManagementNeuroinformaticsShip Cost EstimationManufacturing PlanningNeuroimagingManufacturing SystemsSupply Chain ManagementBrain ImagingProduction PlanningSchedule Change CostsProduction SchedulingBusinessScheduling (Production Processes)Material Requirements PlanningNeuroscienceProduction ForecastingMicroeconomics
The Wagner‑Whitin dynamic economic lot‑sizing technique is rarely used in real‑world production scheduling because its solutions are highly sensitive to future parameter estimates, a concern known as “nervousness” among MRP users. The authors propose a procedure that incorporates schedule‑change costs into the Wagner‑Whitin model, allowing updated forecasts to be used only when the combined setup, inventory, and change costs justify a schedule adjustment. The approach enables effective use of updated forecasts, changing the schedule only when the combined setup, inventory, and change costs make it economically worthwhile.
The Wagner-Whitin dynamic economic lot-sizing technique has not been widely applied to real-world production scheduling problems. A frequently quoted reason is the extreme sensitivity of the solution to changes in the estimates of future values of the problem's parameters, especially future demand. This “nervousness” has been of great concern to users of MRP (Material Requirements Planning) systems. A solution procedure which incorporates the cost of changing the current production schedule alleviates this nervousness by considering its economic effect. Thus updated parameter forecasts can be effectively used, and the schedule will be changed only when the joint consideration of setup, inventory holding, and schedule change costs indicates that it is economically beneficial to do so.
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Dynamic Version of the Economic Lot Size Model
Harvey M. Wagner, T. M. Whitin · Management Science · 2004 · 2.1K citations
Mathematical Programming, Engineering, Business Analytics +22
Reschedule the reschedules you just rescheduled - Way of life for MRP?
Hal Mather · 1977 · 69 citations