Description
The PPT explaining about the need of flexible BOM.
MATERIAL REQUIREMENTS PLANNING WITH FLEXIBLE BILL-OF-MATERIALS
Agenda
?
Discuss Flexible Bill-of-materials (BOM)
LP model to counter shortage using flexible BOM Food production environment example Conclusions
?
?
?
A need for Flexible BOM
?
To deal with excessive nervousness in the system
? Excessive
rescheduling costs ? Capacity Utilization fluctuation
?
Strategies investigated for solution:
? Safety
Stock/Safety Lead times
Investment will be high
? Inventory
A need for Flexible BOM (contd)
? Freezing
? Leads
Master Production Schedule (MPS)
to high total cost
? Forecasting
? This
beyond planning horizon
is susceptible to demand variability
? MRP
? You
system with fixed BOM
have to change production plan to deal with system nervousness
Flexible Bills-Of-Material
?
Flexibility is at item level
?
Characterized by ranges in the quantities of lower level items in a parent item.
This enables tackling system unpredictability without change in production plan. Ideal for cases where a part/assembly can be replaced by another part/assembly First motivated by the ALSS initiative of NASA.
?
?
?
Example of Food BOM
Example of Flexible BOM
The LP model
LP model contd…
?
Objective
? Minimize
deviation from standard BOM
?
Constraints
? Quantity
? ? ki
of lower level items must be same as in standard BOM
= ?ksi
? Sum
? ki
of +ve and –ve deviations of quantity of each lower level item should equal total deviation.
– ?i+ + ?i- = ksi
LP model contd…
? The
sum of the current period inventory on hand and scheduled receipt should not be less than derived demand for each item based on the planned order release
? (POHit-1
+ SRit ) ? (ki*PORLt )
? The
? li
quantity of lower level items must be within the upper and lower bounds.
< ki < ui
Inventory Records
LP solution
?
?
Consider that in Period 4, Lettuce orders received are 7 units instead of 11 => MPS requirement cannot be met LP Equations (constraints) –
? k1
+ k2 + k3 = 12
? -(k1*4)+(9+7)
?0 ? -(k2*4)+(0+18) ?0 ? -(k3*4)+(0+14) ?0
?2
? k1 ? 9, 0 ? k2 ? 7, 0 ? k3 ? 6
Solution from LP
Conclusion
?
Flexible BOM can be used to deal with possible shortages when using MRP Food Processing is one area of application Can be extended to manufacturing
? In
?
?
the case of Electronics Industry, substitution of solid state components can be done.
References
?
Bala Ram, M. Reza. Nagashineh-Pour and Xuefeng Yu ‘Material Requirements Planning with flexible bills-of-material’, International Journal of Production Research, Vol. 44, No. 2, 15 January 2006, pp. 399-415.
doc_322602598.pptx
The PPT explaining about the need of flexible BOM.
MATERIAL REQUIREMENTS PLANNING WITH FLEXIBLE BILL-OF-MATERIALS
Agenda
?
Discuss Flexible Bill-of-materials (BOM)
LP model to counter shortage using flexible BOM Food production environment example Conclusions
?
?
?
A need for Flexible BOM
?
To deal with excessive nervousness in the system
? Excessive
rescheduling costs ? Capacity Utilization fluctuation
?
Strategies investigated for solution:
? Safety
Stock/Safety Lead times
Investment will be high
? Inventory
A need for Flexible BOM (contd)
? Freezing
? Leads
Master Production Schedule (MPS)
to high total cost
? Forecasting
? This
beyond planning horizon
is susceptible to demand variability
? MRP
? You
system with fixed BOM
have to change production plan to deal with system nervousness
Flexible Bills-Of-Material
?
Flexibility is at item level
?
Characterized by ranges in the quantities of lower level items in a parent item.
This enables tackling system unpredictability without change in production plan. Ideal for cases where a part/assembly can be replaced by another part/assembly First motivated by the ALSS initiative of NASA.
?
?
?
Example of Food BOM
Example of Flexible BOM
The LP model
LP model contd…
?
Objective
? Minimize
deviation from standard BOM
?
Constraints
? Quantity
? ? ki
of lower level items must be same as in standard BOM
= ?ksi
? Sum
? ki
of +ve and –ve deviations of quantity of each lower level item should equal total deviation.
– ?i+ + ?i- = ksi
LP model contd…
? The
sum of the current period inventory on hand and scheduled receipt should not be less than derived demand for each item based on the planned order release
? (POHit-1
+ SRit ) ? (ki*PORLt )
? The
? li
quantity of lower level items must be within the upper and lower bounds.
< ki < ui
Inventory Records
LP solution
?
?
Consider that in Period 4, Lettuce orders received are 7 units instead of 11 => MPS requirement cannot be met LP Equations (constraints) –
? k1
+ k2 + k3 = 12
? -(k1*4)+(9+7)
?0 ? -(k2*4)+(0+18) ?0 ? -(k3*4)+(0+14) ?0
?2
? k1 ? 9, 0 ? k2 ? 7, 0 ? k3 ? 6
Solution from LP
Conclusion
?
Flexible BOM can be used to deal with possible shortages when using MRP Food Processing is one area of application Can be extended to manufacturing
? In
?
?
the case of Electronics Industry, substitution of solid state components can be done.
References
?
Bala Ram, M. Reza. Nagashineh-Pour and Xuefeng Yu ‘Material Requirements Planning with flexible bills-of-material’, International Journal of Production Research, Vol. 44, No. 2, 15 January 2006, pp. 399-415.
doc_322602598.pptx