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ResearchArticle
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OptimizationofmaterialrequirementplanningbyGoalprogrammingmodel
DavoodGharakhani Facultyof ManagementandAccounting,IslamicAzadUniversity(IAU),QazvinBranch, Qazvin,Iran davoodgharakhany@yahoo.com
ABSTRACT Material requirement planning (MRP) is a plan for the production and purchase of the components used in making items in the master production schedule. It shows the quantities neededandwhen manufacturing intendstomake orusethem.Inthispaper,asanextensionof work reported by Yenisey (2006), where optimization of material flow in MRP had been presented, a goal programming model is used to minimize production cost, minimize holding cost and minimize costs of the extra time used by resources, and the costs of the lazy time of resources. The aim of this paper is to demonstrate the usefulness and significance of the Goal programmingmodelforOptimizationofMaterialRequirementPlanning.Asetofrealdatafrom an automobile Gearbox manufacture is used to test the effectiveness and the efficiency of the proposed model. The model of the example case is solved and the computational results are given. The corresponding results show thatthe proposed models can help manufacturers make betterdecisionswhentheyhavemultipleobjectives. Keywords:Materialrequirementplanning,Goalprogramming,Optimization,capacityof resources 1.Introduction Traditionally, manufacturing companies have controlled their parts through the reorder point (ROP) technique. Gradually, they recognized that some of these components had dependent demand,andmaterialrequirementsplanning(MRP)evolvedtocontrolthedependentitemsmore effectively.MRPhasbeenaverypopularandwidelyusedmultilevelinventorycontrolmethod since 1970s. The application of this popular tool in materials management has greatly reduced inventorylevelsandimprovedproductivity(WeeandShum,1999).TheintroducedMRPwasthe firstversionofMRPsystem,namedasMaterialsRequirementsPlanning(MRPI).Later,several MRP systems were extended into other versions including Manufacturing Resources Planning (MRPII)andEnterpriseResourcesPlanning(ERP)(Browneetal.,1996). MRP is a commonly accepted approach for replenishment planning in major companies. The MRPbased software tools are accepted readily. Most industrial decision makers are familiar withtheiruse.ThepracticalaspectofMRPliesinthefactthatthisisbasedoncomprehensible rules, and provides cognitive support, as well as a powerful information system for decision ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 297
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making. Some instructive presentations of this approach can be found in Baker (1993), Zipkin (2000),Tempelmeier(2006),DolguiandProth(2010)andGraves(2011). Materialrequirementsplanningwhichisamethodbasedonplanningtherequirementsaccording tothemasterproductionschedule(MPS)which isprepareddependingoncustomersdemands. TwobasicdataarenecessaryforMRP:(1)theMPS,and(2)Billofmaterials(BOM).MPSisa plan showing the product which will be produced when and in what quantity based on forecasting or received customer orders. BOM shows which subcomponentorraw material is used for which product and in what quantity. Required material quantities are calculated by hierarchically multiplying the production quantities in MPS by unit usage coefficients in BOM.MRP determines the quantity and timing of the acquisition of dependent demand items needed to satisfy master schedule requirements. One of its main objectives is to keep the due date equal to the need date, eliminating material shortages and excess stocks. MRP breaks a component into parts and subassemblies, and plans for those parts to come into stock when needed.Materialrequirementplanningsystemshelpmanufacturesdeterminepreciselywhenand how much materialtopurchaseandprocessbaseduponatimephasedanalysisofsalesorders, production orders, current inventory and forecasts. They ensure that firms will always have sufficient inventory to meet production demands, but not more than necessary at any given time.MRPwillevenschedulepurchaseordersand/orproductionordersforJustintimereceipt. TheaimofthispaperistodemonstratetheusefulnessandsignificanceoftheGoalprogramming modelforOptimizationofMaterialRequirementPlanning.Inproductionplanning,attentionthe capacityofavailableresourcesisveryimportant.Therefore,inthispaper,capacitiesofresources were added to the model proposed by Yenisey. In fact, for production in different periods of planning horizon should be observed capacity of available resources. This research considers capacityofavailableoftwotypesof sources,thesesourcesarerespectively:(1)Manpower,(2) Machinery. The goal programming technique appears to be an appropriate, powerful, and flexibleone fordecision analysistohelpthetroubled moderndecision makerwho is burdened with achieving multiple conflicting objectives under complex environmental constraints (Schniederjans,1995Tamizetal.,1998AouniandKettani,2001). However, application of GP to the reallife problems may be faced with two important difficulties. One of which is expressing the decision making's vague goals and/or constraints mathematicallyandthesecond istheneedtooptimizeallgoalssimultaneouslyandassuchthe solutionwouldbethebestforthedecisionmaking.Thispaperisorganizedasfollows.Firstly,in Section 2, presents the Research background. In Section 3, presents the Goal programming approach.Then, with use a mathematical programming model as proposed by Yenisey, a Goal programming model for optimization of MRP is formulated in Section 4. Section 5 shows the architecture used to implement and solve the proposed model with use real data from an automobile Gearbox manufacturer. In Section 6, this paper offers some conclusions and directionsforfurtherresearch. 2.Researchbackground Yenisey (2006) applied a flownetwork model and solved a linear programming method for MRPproblemsthatminimizedthetotalcostoftheMRPsystem.Mulaetal.(2006)provideda newlinearprogrammingmodelformediumtermproductionplanninginacapacityconstrained MRPwithamultiproduct,multilevel,andmultiperiodproductionsystem.Theirproposedmodel ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 298
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comprisedthreefuzzysubmodelswithflexibilityintheobjectivefunction,marketdemand,and capacityofresources. Wilhelm and Som (1998) present an inventory control approach for an assembly system with severaltypesofcomponents.Theirmodelfocusesonasinglefinishedproductinventory,sothe interdependence between inventory levels of different components is once again neglected. Axster(2005)considersa multi level assemblysystemwhereoperationtimesare independent random variables. The objective is to choose starting times (release dates) for different operations in order to minimize the sum of the expected holding and backlogging costs. The paper(LoulyandDolgui,2002)considersthecaseoftheobjectivefunctionminimizingthesum of average holding and backlogging costs. While Louly et al. (2008) study the case when backlogging cost is replaced with a service level constraint. The obtained models for optimal plannedleadtimesrepresentgeneralizationsofthediscreteNewsboymodel. KanetandSridharan(1998)examinedlatedeliveryofrawmaterials,variationsinprocesslead times, interoperation move times and queue waiting times in MRP controlled manufacturing environment.Tomodelsuchenvironment,theyrepresenteddemandby interarrivaltimerather thandefinedfromthemasterproductionschedule. Kumar (1989) studies a single period model (one assembly batch) for a multicomponent assembly system with stochastic component lead times and a fixed assembly due date and quantity.Theproblemistodeterminethetimingofeachcomponentordersothatthetotalcost composed of the component holding and product tardiness costs is minimized. Chauhan et al. (2009), presents an interesting singleperiod model. Their approach considers a punctual fixed demand for one finished product. Multiple types of components are needed to assembly this product.Theobjectiveistodeterminetheorderingtimeforeachcomponentsuchastominimize thesumofexpectedholdingandbackloggingcosts. Van Donselaar and Gubbels (2002) compare MRP and line requirements planning (LRP) for planningorders.Theirresearchbasicallyfocusesonminimizingthesysteminventoryandsystem nervousness. They also discuss and propose LRPtechnique to achieve their goals. Minifie and Davies(1990)developedadynamicMRPcontrolledmanufacturingsystemsimulationmodelto study the interaction effects of demand and supply uncertainties. These uncertainties were modelled in terms of changes in lotsize, timing, planned orders and policy fence on several systemperformancemeasures,namelylatedeliveries,numberofsetups,endinginventorylevels, component shortages and number of exception reports. Billington et al. (1983) suggest a mathematical programming approach for scheduling capacity constrained MRP systems. They propose a discretetime, mixedinteger linear programming formulation. In order to reduce the number of variables, and thus the problem size, they introduce the idea of product structure compression. 3.Goalprogrammingapproach Goal programming (GP) is a multiobjective optimization tool. Goal programming models are very similar to linear programming models. However, there are some differences. While linear programs have only one objective to be maximized or minimized, goal programs consider multiple goals that are often in conflict with each other. As goal programs have several goals ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 299
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withtradeoffs, in mostinstances,allofthesegoalscannotberealizedatthesametime.Thus, goal programs aim to minimize the deviations among the target goals and the actual results considering the priorities assigned. The objective function of a goal programming model is expressedintermsofthedeviationsfromthedesiredgoalsanddeviationsfromthedesiredgoals arepenalized(Cohon,2004). ThegeneralaimofGP istheoptimizationofseveralconflictinggoalspreciselydefined bythe decision maker(s) by minimizing the deviations from the target values. The original objectives are expressed as a linear equation with target values and two auxiliary variables. These two auxiliary variables represent under achievement of the target value by negative deviation (d ) + and over achievement of the target value by positive deviation (d ). If the desire is not to + underachievementthegoal,d shouldbedriventozero.Tothecontrary,ifd isdriventozero, the overachievement of the goal will not be realized. The unwanted deviations between target values of objectives are minimized hierarchically. Hence, the goals of primary importance are satisfiedfirst,anditisonlythenthegoalsofsecondimportanceareconsidered,andsoforth. It may be notedthatthe structureof a GP model involves twotypes of constraint: system and goalconstraints.Thesystemconstraintsarethosewhicharemorerestrictiveinnatureandhave tobesatisfiedbeforethegoalconstraints,astheyrepresenttheexistingcapabilities,ratherthan what we would like to achieve. From the above discussion, it can be deduced that deviational variablesaremutuallyexclusive. Thisrelationshipismathematicallyexpressedas:
ThestepsneededtostructureaGPmodelarethreefold: (1)Goalsareidentifiedandexpressedasconstraints. + (2)Goalsareanalysedtodeterminethecorrectdeviationalvariablesneededforthem,di ,di ,or both. (3) A hierarchy of importance among goals is established by assigning to each of them a pre emptivepriorityfactor,Pj. These preemptive priority factors reflect the hierarchical relationships in such a way that P1 representsthehighestpriority,P2 thesecondhighest,andsoon.Inotherwords,thePsindicatesa simpleordinalorderingofthegoals. Oncetheabovestepsarecompleted,theproblemcanbequantifiedasaGPmodel asfollows:
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4. Modelformulation Inthispaper,agoalprogrammingmodelisusedtosolvethemultiobjectiveMaterial requirementplanningproblem.Thecompanyhasindicatedthreegoalstobeachieved: (1)Minimizationofproductioncost(productiongoal) (2)Minimizationofholdingcost(holdinggoal)and (3)Minimizationofcostsoftheextratimeusedbysources,andthecostsofthelazytimeof sources(sourcesgoal). Inthefollowing,theparametersandthevariablesforthemodelaredefined.Mathematical formulationoftheproposedmodel,includingvariousgoalconstraintsrelatedtotherespective goals,systemconstraints,andtheachievementfunctionarealsodescribed.Modelof thispaper canbeinterpretedatthreehierarchicallevels.Thefirstlevelisforproducts,secondisforsub components,andfinally,thethirdoneisforrawmaterials. A threelevel hierarchical producttree made of products, subcomponents and raw materials is usedfortheresearch.Productsuppliesineveryperiodofplanninghorizontriggerthesystemas pulling required products in order to satisfy the demands. Subcomponents according to these supplies and raw materials depending on subcomponents flow throughthe network. The plant may have some initial inventory on hand and a policy of transferring some inventory from a periodtoothersfollowing.Anupperboundmadeofzerocanbeputontheseflowsinordernot to allow onhand inventory in stock policy. The initial onhand inventories flows have upper bounds representing the amounts being held in stock. If the decisionmaker wants to hold inventory at the end of planning horizon, he/she can put lower bounds on onhand inventory flowsgoingbeyondthelastperiod. The parameter kr must be defined as follows for each raw material before the formulation is given. kr =max{CLc+RLr|(c,r) BOMC}. 4.1Notations Inthissection,thenotationusedbyYenisey(2006)isgiven,whichisappliedtominimizetotal costsintheMRPsystem. Indexes: p i,j c r Costs: pcc unitcostofproductpincludingallproductioncostsotherthanraw materialsandsubcomponentspurchasingcosts ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 301 indexforproducts indexforperiods indexforsubcomponents indexforrawmaterials
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ccc rcc php chc rhr pihp cihc rihr Parameters: PDp,i TPISp TCISc TRISr TPFSp TCFSc TRFSr cup,c ruc,r CLc RLr
demandforproductpinperiodi totalinitialonhandinventorylevelofproductp totalinitialonhandinventorylevelofsubcomponentc totalinitialonhandinventorylevelofrawmaterialr totalfinalonhandinventorylevelofproductp totalfinalonhandinventorylevelofsubcomponentc totalfinalonhandinventorylevelofrawmaterialr unitusageofsubcomponentcforproductp unitusageofrawmaterialrforsubcomponentc leadtimeofsubcomponentc leadtimeofrawmaterialr
Variables: Basicdecisionvariables: PPp,j CPc,j RPr,j quantityofproductp thatmustbeprocuredinperiod j quantityofsubcomponentc thatmustbeprocuredinperiodj quantityofrawmaterial rthatmustbeprocuredinperiodj
Secondarydecisionvariables: PIp,i,j CIc,i,j RIr,i,j PISp,i CISc,i inventoryofproductpcarriedfromperioditoperiodj inventoryofsubcomponentccarriedfromperioditoperiodj inventoryofrawmaterialrcarriedfromperioditoperiodj quantityofproductptobeusedinperiodifrominitialonhandinventory quantity of component c to be used in period i from initial onhand inventory RISr,i quantity of raw material r to be used in period i from initial onhand inventory quantityofproductptobesavedinperiodiforonhandinventorybeyond PFSp,i planninghorizon quantity of component c to be saved in period i for onhand inventory CFSc,i beyondplanninghorizon quantity of raw material r to be saved in period i for onhand inventory RFSr,i ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 302
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beyondplanninghorizon Sidedecisionvariables: supplyofproductpinperiodi PSp,i demandforsubcomponentctobeusedinproductpinperiodi CDp,c,i demandforrawmaterialrtobeusedinsubcomponentcinperiodi RDc,r,i Sets: setofproducts P setofsubcomponents C setofrawmaterials R setofperiodsinplanninghorizon I BOMP ={(p,c)|p P,c C, c is a subcomponent used in product P}Set of Billof materialsforrelationsbetweensubcomponentsandproducts BOMC={(c,r)|c C,r R,risarawmaterialusedinsubcomponentc}SetofBillof materialsforrelationsbetweenrawmaterialsandsubcomponents. Additionalnotation: In addition to the abovementioned notation some additional notation is applied in this section in order to incorporate the limits of capacity of sources into model and also, changetheflownetworkmodeltogoalprogrammingmodel. Indexes: indexforsources indexforperiods s j Costs: Undertimehourcostofthesources onperiodj Overtimehourcostofthesources onperiodj Ctups,j Ctops,j Parameters: Requiredtimeofthesourcesforunitofproductionoftheproductp Availablecapacityofthesourcesintheperiodj APp,s CAPs,j Variable: Undertimehoursofthesources onperiodj Overtimehoursofthesources onperiodj TUPs,j TOPs,j Auxiliary variables deviationvariableofunderachievementofGoalp (theproductiongoal) ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011
dp
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deviationvariableofoverachievementofGoalp (theproductiongoal) deviationvariableofunderachievementofGoalh (theholdinggoal) deviationvariableofoverachievementofGoalh (theholdinggoal) deviationvariableofunderachievementofGoals (thesourcesgoal) deviationvariableofoverachievementofGoals (thesourcesgoal) 4.2Goalconstraintsandobjectivefunctions 4.2.1Goal1:Theproductiongoal
+ dp dh + dh ds + ds
Thecompanyevaluatesproductioncostforallperiodsandthereisanexpectedproductioncost target to be achieved at the end of the planning horizon. The production goal constraint is illustratedbelow
This first component in constraint (1) is the total production cost of products including all production costs other than raw materials and subcomponents purchasing costs. The second component is the total subcomponent cost including purchasing cost for items procured from outside while production cost for those produced within the plant. The third component is the total material cost including purchasing cost for items procured from outside while production cost for those produced within the plant. Parameter GOALp denotes the acceptable production + costsetbymanagement.Apositivedeviationalvariable,dp ,representstheoverachievementof the aspiration level of production goal and a negative deviational variable, dp , represents the + underachievementoftheaspirationlevelofproductiongoal.Thisgivesdp .dp =0. 4.2.2Goal2:Theholdinggoal Thecompanyevaluatesholdingcostforallperiodsandthereisanexpectedholdingcosttarget tobeachievedattheendoftheplanninghorizon.Thegoalconstraintisformulatedbelow.
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Constraint(2)pursuestoachievetheholdingcostsgoal.Thetotalholdingcostsinclude,holding costsof products, subcomponents and raw materials. Holding costs for periods in the planning horizon, php, chc and rhr, include only inventory carrying cost. They do not include any productionorpurchasingcost.Theseholdingcostsarealsovalidfortheinventoriesbeingsaved for the periods beyond the last period of the planning horizon. However, the holding costs definedfortheinventoriesbeingcarriedfromtheperiodsbeforethefirstperiodoftheplanning horizon, pihp, cihc and rihr include all costs made of both production or purchasing cost and inventory carrying costs after they were procured. Parameter GOALh denotes the acceptable + holding cost set by management. A positive deviational variable, dh , represents the over achievement of the aspiration level of holding goal and a negative deviational variable, dh , + representstheunderachievementoftheaspirationlevelofholdinggoal.Thisgivesdh .dh =0. 4.2.3Goal3:Thesourcesgoal Management is pursuing to achieve an acceptable level for costs of the extra time used by sources, and the costs of the lazy time of sources. Therefore, the sources goal constraint is formulatedbelow
Thefirstcomponentinconstraint(3)representsthetotalcostsoftheextratimeusedbysources, andthecostsofthelazytimeofsources.ParameterGOALs denotestheacceptablesourcescost + setbymanagement.Apositivedeviationalvariable,ds ,representstheoverachievementofthe aspiration level of sources goal and a negative deviational variable, ds , represents the under + achievementoftheaspirationlevelofsourcesgoal.Thisgivesds .ds =0. The achievement function of the multiobjective material requirement planning problem is formulatedasfollows:
+ + + Minimize{dp ,dh ,ds }
4.3Constraints
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Equations (4) to (15) were used as mentioned by Yenisey. However, since goal programming modelrequiresalltheequationsthatwereusedpreviouslybyYenisey,alltheconstraintsusedin the singleobjective optimization case are also retained and additional equations (i.e. equations (1)to(3),whicharerequiredforminimizingthetotalcostandachievetogoals.also,sinceThe productionineveryperiodislimitedbytheavailabilityofagroupofsharedresources.equation (16)considersthelimitsofcapacityoftheseresources. This research considers capacity of available of two types of sources, these sources are respectively:(1)Manpower,(2)Machinery.ThedecisionvariablesTUPs,j andTOPs,j arenot limited by any established parameter but are penalized with the corresponding costs in the equation(3).Thelimitationofthesevariablesforspecificapplicationscouldbeeasilyconsidered taking into account that if those limits are exceeded the solution of the model could be no feasible. Itisnecessarytounderlinethatanadjustmentismadeforindicesusedinmodelinorder tomakethemconsistent,i.e.minI=max{CLc+RLr|(c,r) BOMC}+1.Thisequationisusedas
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abasisfortheadjustmentsmadeinEqs.(13)and(14).Hence,itisguaranteedthatonlypositive indicesareusedandthefirstperiodofplanninghorizonsindexisone. 5.Example Athreelevelhierarchicalmodelmadeisasanexampleforthisresearch.TheBOMstructurefor theexamplecaseisgiveninFig.1.Theexampleconsistsofoneproduct,sixsubcomponentsand tworawmaterials.InFig.1,numbersinbracketsbynodesrepresenttheleadtimesfortheitems, andthenumbersinparenthesesneararcsrepresenttheunitusageofthesubitems.Additionally, thefullformulationoftheexampleisgiveninAppendixA. Thestructureoftheexamplehasveryhighflexibilityinordertoincludemoreperiods,products andsubitems.ThemodeloftheexamplecasewassolvedbyLindo/PCrunningonanotebook. Theoptimumachievedat104rditeration.Themodelmadeof142constrainsand278variables. Thenumberof non zeroeswas732.Thesolutiontimewaslessthan1s.
Figure1:TheBOMoftheexamplecase Companyhassettargetvalues,tobeachievedundereachofthethreegoals,theyare:Production cost (4,500,000,000), holding cost (20,000,000) and sources cost (100,000,000). The optimum valuesofthebasicdecisionvariablesandtargetvaluesaresummarizedintheTable1.Thesigns ofN/AinthecellsoftheTable1meanthatthesupplyfortheintersectionofcorresponding periodanditemcannotexistduetothestructureofthesampleproblem.Thecompletesolutionis providedinAppendixB. Inthisrun,thegoalsaretominimizetheoverachievementofProductioncost,holdingcostand + sourcescost.Thepositivedeviationvariabledp is28,400,000.Thisshowsthatproductioncost ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 307
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+ is more overachieved. The positive deviation variable dh is 0. The goal for holding cost has + beenachieved.Finally,thepositivedeviationvariableds is8,000,000.Thisshowsthatsources costismoreoverachieved.
Table1:Production/procurementvolumesofthematerialsandTargetvalue
8 8000 N/A N/A N/A N/A N/A N/A N/A N/A 7 9500 0 8000 0 0 N/A N/A N/A N/A 6 5 4 N/A 36500 28000 35200 36500 0 0 8000 0 3 N/A N/A N/A N/A N/A 36200 18900 0 0 2 periods 1 N/A N/A N/A N/A N/A N/A N/A 0 191300 N/A 1 N/A N/A N/A N/A N/A N/A 1 2 3 4 5 6 Products Components
191500 1 N/A 2
Rawmaterials
Productioncost(4,528,400,000),holdingcost(20,000,000)andsourcescost(108,000,000) N/A:Thevaluecannotexistduetothesampleproblemsstructure.
6.Conclusionandscopefor futureresearch The planning and use of the production resources and the planning for the provisioning/production of materials is a considerably complex process. Many manufacturing environments, such as the automobile industry, require this kind of planning for dozens of thousandsofcomponentsandsubassemblies.Inthispaper,asanextensionofworkreportedby Yenisey,agoalprogrammingmodelispresentedtominimizeproductioncost,minimizeholding cost and minimize costs of the extra time used by resources, and the costs of the lazy time of resources.Since,theproductionineveryperiodislimitedbytheavailabilityofagroupofshared resources. This paper considers the limits of capacity of these resources. This model can effectively findProduction/procurementvolumesofthematerials.Themodelwas implemented inanautomobileGearboxmanufacturercasessuccessfully. This study has some propositions for further research. (a)Types of uncertainty could be incorporated,suchas,uncertaintyindemand,uncertaintyinleadtimes,uncertaintyinresources capacityoruncertaintyduetoqualityvariations.(b)Theproposedmodelinthispapercanbethe constructionblocksforadecisionmakingsupportsystemforproductionplanningwithimprecise data. (c) Further research can focus on a nonlinear goal programming model. (d) Further researchcan usefromfuzzycoefficientsinmodel.
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References 1. Aouni, B., Kettani, O. (2001), Goal programming model: A glorious history and a promisingfuture.EuropeanJournalofOperationalResearch,133,pp 225231. 2. Axster, S. (2005), Planning order release for an assembly system with random operationstimes.ORSpectrum,27,pp 459470. 3. Baker, K.R. (1993), Requirement planning. In: Graves, S.C. (Ed.), Handbooks in Operations Research and Management Science, Logistics of Production and Inventory, vol.4.NorthHolland,Amsterdam,pp571628. 4. BillingtonPJ,McClainJO,ThomasJ.(1983),Mathematicalprogrammingapproachesto capacityconstrained MRP systems: review, formulation and problem reduction. ManagementScience29,pp112641. 5. Browne J., Harben J. and Shivnan J. (1996), Production Management Systems: an integratedperspective,SecondEdition,AddisonWesleyPress. 6. Chauhan,S.S.,Dolgui,A.,Proth,J.M.(2009),Acontinuousmodelforsupplyplanning ofassemblysystemswithstochasticcomponentprocurementtimes.InternationalJournal ofProductionEconomics120,pp411417. 7. Cohon,J.L.(2004), MultiobjectiveProgrammingandPlanning,Dover,Mineola,NY. 8. Dolgui, A., Proth, J.M. (2010), Supply Chain Engineering: Useful Methods and Techniques.Springer. 9. Graves,S.C.(2011),Uncertaintyandproductionplanning.In:Kempf,K.G.,Keskinocak, P.,Uzsoy,R.(Eds.),PlanningProductionandInventoriesintheExtendedEnterprise.A State of the Art Handbook. Series: International Series in Operations Research & ManagementScience,151,pp 83102. 10. Kanet JJ, Sridharan SV. (1998), the value of using scheduling information in planning material requirements.InternationalJournalof Decision Science29,pp47996. 11. Kumar, A. (1989), Component inventory cost in an assembly problem with uncertain supplierleadtimes.IIETransactions21(2), pp112121. 12. Louly, M.A., Dolgui, A. (2002), Newsboy model for supply planning of assembly systems.InternationalJournalofProductionResearch40,pp44014414. 13. Louly, M.A., Dolgui, A., Hnaien, F. (2008), Optimal supply planning in MRP environments for assembly systems with random component procurement times. InternationalJournalofProductionResearch46(19),pp 54415467. ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 309
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14. Mula, J., Poler, R., and Garcia, G. P. (2006), MRP with flexible constraints: a fuzzy mathematicalprogrammingapproach.FuzzySetsandSystem,157,pp 7497. 15. Minifie JR, Davis RA. (1990), Interaction effects on MRP nervousness. International Journalof Production Research28,pp17383. 16. Schniederjans, M.J. (1995),Goal Programming Methodology and Applications. Kluwer AcademicPublishers,Boston. 17. Tamiz,M.,Jones,D.,&Romero,C.(1998),Goalprogrammingfordecisionmaking:An overviewofthecurrentstateoftheart.EuropeanJournalofOperationalResearch,111, pp569581. 18. TempelmeierH.(2006),InventoryManagementinSupplyNetworks:Problems,Models, Solutions,andBooksondemandGmbH. 19. VanDonselaar,K.H.,Gubbels,B.J.(2002),Howtoreleaseorders inordertominimise system inventory and system nervousness? International Journal of Production Economics78,pp335343. 20. WeeHM,ShumYS.(1999),Modeldevelopmentfordeterioratinginventoryinmaterial requirementplanningsystems.Computers&IndustrialEngineering36,pp219225. 21. Wilhelm, W.E., Som, P. (1998), Analysis of a singlestage, singleproduct, stochastic, MRPcontrolledassemblysystem.EuropeanJournalofOperationalResearch108,pp74 93. 22. Yenisey, M. M. (2006), A flownetwork approach for equilibrium of material requirementsplanning.InternationalJournalofProduction Economics,102,pp 317332. 23. Zipkin,P.(2000), FoundationofInventoryManagement.McGrawHill.
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Appendix A:Thecompletemodelofthesampleproblem P={1} c={1,2,3,4,5,6} r={1,2} BOMP={(1,1), (1,2),(1,3), (1,4), (1,5), (1,6)} BOMC={(1,1), (1,2), (2,1), (2,2), (3,1) (3,2) (4,1), (4,2),(5,1), (5,2), (6,1), (6,2)} CL1=1, CL2=1, CL3=1, CL4=1, CL5=2, CL6=2 RL1=2, RL2=1 MinI=max{CLc+RLr|(c,r) BOMC}+1
=max{CL1+RL1,CL1+RL2 ,CL2+RL1 ,CL2+RL2 ,CL3+RL1 ,CL3+RL2 ,CL4+RL1 ,CL4+RL2 , CL5+RL1 , =max{3,2,3,2,3,2,3,2,4,3,4,3}+1=5 I={5,6,7,8} (Sincetheplanninghorizonconsistsoffourperiods) k1=2, k2 =2 CL5+RL2 ,CL6+RL1 , CL6+RL2}+1
Subjectto PP1,5+PP1,6+PP1,7+PP1,8+CP1,4+CP1,5+CP1,6+CP1,7+CP2,4+CP2,5+CP2,6+CP2,7+CP3,4+CP3,5+CP3,6+ CP3,7+CP4,4 +CP4,5 +CP4,6+CP4,7+CP5,3+CP5,4+CP5,5+CP5,6+CP6,3+CP6,4+ + CP6,5+CP6,6+RP1,1+RP1,2 +RP1,3+RP1,4 +RP2,2 +RP2,3 +RP2,4 +RP2,5dp +dp =GOALp PI1,5,6+PI1,5,7+PI1,5,8+PI1,6,7+PI1,6,8+PI1,7,8+CI1,5,6+CI1,5,7+CI1,5,8+CI1,6,7+CI1,6,8+CI1,7,8+CI2,5,6+CI2,5, 7+CI2,5,8+CI2,6,7+CI2,6,8+CI2,7,8+CI3,5,6+CI3,5,7 +CI3,5,8+CI3,6,7+CI3,6,8+CI3,7,8+CI4,5,6+CI4,5,7+CI4,5,8+CI4,6,7+CI4,6,8+CI4,7,8+CI5,5,6 +CI5,5,7+CI5,5,8+CI5,6,7+CI5,6,8+CI5,7,8+CI6,5,6+CI6,5,7+CI6,5,8+CI6,6,7+CI6,6,8+CI6,7,8+RI1,3,4+RI1,3,5+R I1,3,6+RI1,4,5 +RI1,4,6+RI1,5,6+RI2,3,4+RI2,3,5+RI2,3,6 +RI2,4,5+RI2,4,6+RI2,5,6+PFS1,5+PFS1,6+PFS1,7+PFS1,8+CFS1,5+CFS1,6+CFS1,7 +CFS1,8+CFS2,5+CFS2,6+CFS2,7+CFS2,8+CFS3,5+CFS3,6+CFS3,7+CFS3,8+CFS4,5+CFS4,6+CFS4,7+ CFS4,8+CFS5,5 +CFS5,6+CFS5,7+CFS5,8+CFS6,5+CFS6,6+CFS6,7+CFS6,8+RFS1,3+RFS1,4+RFS1,5+RFS1,6+RFS2,3+ RFS2,4+RFS2,5+RFS2,6+PIS1,6 +PIS1,7+PIS1,8+CIS1,6+CIS1,7+CIS1,8+CIS2,6+CIS2,7+CIS2,8+CIS3,6+CIS3,7+CIS3,8+CIS4,6+CIS4,7 +CIS4,8+CIS5,6+CIS5,7+CIS5,8+CIS6,6+CIS6,7+CIS6,8+RIS1,4+RIS1,5+RIS1,6+RIS2,4+RIS2,5+RIS2,6+ + TPIS1+TCIS1+TCIS2+TCIS3 +TCIS4+TCIS5+TCIS6+TRIS1+TRIS2dh +dh =GOALh
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TUP1,5+TUP1,6+TUP1,7+TUP1,8+TUP2,5+TUP2,6+TUP2,7+TUP2,8+ TOP1,5+TOP1,6+TOP1,7+ + TOP1,8+TOP2,5 +TOP2,6+TOP2,7+TOP2,8 ds +ds =GOALs PS1,5+PI1,5,6+PI1,5,7+PI1,5,8+PFS1,5PP1,5PIS1,5=0 PS1,6+PI1,6,7+PI1,6,8+PFS1,6PI1,5,6PP1,6PIS1,6=0 PS1,7+PI1,7,8+PFS1,7PI1,5,7PI1,6,7PP1,7PIS1,7=0 PS1,8+PFS1,8PI1,5,8PI1,6,8PI1,7,8PP1,8PIS1,8=0 PS1, 5>=PD1, 5 PS1, 6>=PD1, 6 PS1, 7>=PD1, 7 PS1, 8>=PD1, 8 PIS1, 5+PIS1, 6+PIS1, 7+PIS1, 8TPIS1=0 PFS1, 5PFS1, 6PFS1, 7PFS1, 8+TPFS1=0 CD1, 1,5PP1, 5=0 CD1, 2,5PP1, 5=0 CD1, 3,5PP1, 5=0 CD1, 4,5PP1, 5=0 CD1, 5,5PP1, 5=0 CD1, 6,5PP1, 5=0 CD1, 1,6PP1, 6=0 CD1, 2,6PP1, 6=0 CD1, 3,6PP1, 6=0 CD1, 4,6PP1, 6=0 CD1, 5,6PP1, 6=0 CD1, 6,6PP1, 6=0 CD1, 1,7PP1, 7=0 CD1,2,7PP1,7=0 CD1,3,7PP1,7=0 CD1,4,7PP1,7=0 CD1,5,7PP1,7=0 CD1,6, 7PP1, 7=0 CD1,1,8PP1,8=0 CD1,2,8PP1,8=0 CD1,3,8PP1,8=0 CD1,4,8PP1,8=0 CD1,5,8PP1,8=0 CD1,6,8PP1,8=0 CD1,1,5+CI1,5,6+CI1,5,7+CI1,5,8+CFS1,5CP1,4CIS1,5=0 CD1,2,5+CI2,5,6+CI2,5,7+CI2,5,8+CFS2,5CP2,4CIS2,5=0 CD1,3,5+CI3,5,6+CI3,5,7+CI3,5,8+CFS3,5CP3,4CIS3,5=0 CD1,4,5+CI4,5,6+CI4,5,7+CI4,5,8+CFS4,5CP4,4CIS4,5=0 CD1,5,5+CI5,5,6+CI5,5,7+CI5,5,8+CFS5,5CP5,3CIS5,5=0 ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 312
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CD1,6,5+CI6,5,6+CI6,5,7+CI6,5,8+CFS6,5CP6,3CIS6,5=0 CD1,1,6+CI1,6,7+CI1,6,8+CFS1,6CI1,5,6CP1,5CIS1,6=0 CD1,2,6+CI2,6,7+CI2,6,8+CFS2,6CI2,5,6CP2,5CIS2,6=0 CD1,3,6+CI3,6,7+CI3,6,8+CFS3,6CI3,5,6CP3,5CIS3,6=0 CD1,4,6+CI4,6,7+CI4,6,8+CFS4,6CI4,5,6CP4,5CIS4,6=0 CD1,5,6+CI5,6,7+CI5,6,8+CFS5,6CI5,5,6CP5,4CIS5,6=0 CD1,6,6+CI6,6,7+CI6,6,8+CFS6,6CI6,5,6CP6,4CIS6,6=0 CD1,1,7+CI1,7,8+CFS1,7CI1,5,7CI1,6,7CP1,6CIS1,7=0 CD1,2,7+CI2,7,8+CFS2,7CI2,5,7CI2,6,7CP2,6CIS2,7=0 CD1,3,7+CI3,7,8+CFS3,7CI3,5,7CI3,6,7CP3,6CIS3,7=0 CD1,4,7+CI4,7,8+CFS4,7CI4,5,7CI4,6,7CP4,6CIS4,7=0 CD1,5,7+CI5,7,8+CFS5,7CI5,5,7CI5,6,7CP5,5CIS5,7=0 CD1,6,7+CI6,7,8+CFS6,7CI65,7CI1,6,7CP6,5CIS6,7=0 CD1,1,8+CFS1,8CI1,5,8CI1,6,8CI1,7,8CP1,7CIS1,8=0 CD1,2,8+CFS2,8CI2,5,8CI2,6,8CI2,7,8CP2,7CIS2,8=0 CD1,3,8+CFS3,8CI3,5,8CI3,6,8CI3,7,8CP3,7CIS3,8=0 CD1,4,8+CFS4,8CI4,5,8CI4,6,8CI4,7,8CP4,7CIS4,8=0 CD1,5,8+CFS5,8CI5,5,8CI5,6,8CI5,7,8CP5,6CIS5,8=0 CD1,6,8+CFS6,8CI6,5,8CI6,6,8CI6,7,8CP6,6CIS6,8=0 CIS1, 5+CIS1, 6+CIS1, 7+CIS1, 8TCIS1=0 CIS2, 5+CIS2, 6+CIS2, 7+CIS2, 8TCIS2=0 CIS3, 5+CIS3, 6+CIS3, 7+CIS3, 8TCIS3=0 CIS4, 5+CIS4, 6+CIS4, 7+CIS4, 8TCIS4=0 CIS5, 5+CIS5, 6+CIS5, 7+CIS5, 8TCIS5=0 CIS6, 5+CIS6, 6+CIS6, 7+CIS6, 8TCIS6=0 CFS1, 5CFS1,6CFS1, 7CFS1, 8+TCFS1=0 CFS2, 5CFS2,6CFS2, 7CFS2, 8+TCFS2=0 CFS3, 5CFS3, 6CFS3, 7CFS3, 8+TCFS3=0 CFS4, 5CFS4, 6CFS4, 7CFS4, 8+TCFS4=0 CFS5, 5CFS5, 6CFS5, 7CFS5, 8+TCFS5=0 CFS6, 5CFS6, 6CFS6, 7CFS6, 8+TCFS6=0 RD1, 1,4CP1, 4=0 RD1, 1,5CP1, 5=0 RD1, 1,6CP1, 6=0 RD1, 1,7CP1, 7=0 RD2, 1,4CP2, 4=0 RD2, 1,5CP2, 5=0 RD2, 1,6CP2, 6=0 RD2, 1,7CP2, 7=0 RD3, 1,4CP3, 4=0 RD3, 1,5CP3, 5=0 RD3, 1,6CP3, 6=0 RD3, 1,7CP3, 7=0 ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume2Issue1,2011 313
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RD4, 1,4CP4, 4=0 RD4, 1,5CP4, 5=0 RD4, 1,6CP4, 6=0 RD4, 1,7CP4, 7=0 RD5, 1,3CP5, 3=0 RD5, 1,4CP5, 4=0 RD5, 1,5CP5, 5=0 RD5, 1,6CP5, 6=0 RD6, 1, 3CP6, 3=0 RD6, 1,4CP6, 4=0 RD6, 1,5CP6, 5=0 RD6, 1,6CP6, 6=0 RD1, 2,4CP1, 4=0 RD1, 2,5CP1, 5=0 RD1, 2,6CP1, 6=0 RD1, 2,7CP1, 7=0 RD2, 2,4CP2, 4=0 RD2, 2,5CP2, 5=0 RD2, 2,6CP2, 6=0 RD2, 2,7CP2, 7=0 RD3, 2,4CP3, 4=0 RD3, 2,5CP3, 5=0 RD3, 2,6CP3, 6=0 RD3, 2,7CP3, 7=0 RD4, 2,4CP4, 4=0 RD4, 2,5CP4, 5=0 RD4, 2,6CP4, 6=0 RD4, 2,7CP4, 7=0 RD5, 2,3CP5, 3=0 RD5, 2,4CP5, 4=0 RD5, 2,5CP5, 5=0 RD5, 2,6CP5, 6=0 RD6, 2,3CP6, 3=0 RD6, 2,4CP6, 4=0 RD6, 2,5CP6, 5=0 RD6, 2,6CP6, 6=0 RD1,1,4+RD2,1,4+RD3,1,4+RD4,1,4+RD5,1,3+RD6,1,3+RI1,3,4+RI1,3,5+RI1,3,6+RFS1,3RP1,1RIS1,3=0 RD1,1,5+RD2,1,5+RD3,1,5+RD4,1,5+RD5,1,4+RD6,1,4+RI1,4,5+RI1,4,6+RFS1,4RI1,3,4RP1,2RIS1,4=0 RD1,1,6+RD2,1,6+RD3,1,6+RD4,1,6+RD5,1,5+RD6,1,5+RI1,5,6+RFS1,5RI1,3,5RI1,4,5RP1,3RIS1,5=0 RD1,1,7+RD2,1,7+RD3,1,7+RD4,1,7+RD5,1,6+RD6,1,6+RFS1,6RI1,3,6RI1,4,6RI1,5,6RP1,4RIS1,6=0 RD1,2,4+RD2,2,4+RD3,2,4+RD4,2,4+RD5,2,3+RD6,2,3+RI2,3,4+RI2,3,5+RI2,3,6+RFS2,3RP2,2RIS2,3=0 RD1,2,5+RD2,2,5+RD3,2,5+RD4,2,5+RD5,2,4+RD6,2,4+RI2,4,5+RI2,4,6+RFS2,4RI2,3,4RP2,3RIS2,4=0 RD1,2,6+RD2,2,6+RD3,2,6+RD4,2,6+RD5,2,5+RD6,2,5+RI2,5,6+RFS2,5RI2,3,5RI2,4,5RP2,4RIS2,5=0 RD1,2,7+RD2,2,7+RD3,2,7+RD4,2,7+RD5,2,6+RD6,2,6+RFS2,6RI2,3,6RI2,4,6RI2,5,6RP2,5RIS2,6=0
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RIS1, 3+RIS1, 4+RIS1, 5+RIS1, 6TRIS1=0 RIS2, 3+RIS2, 4+RIS2, 5+RIS2, 6TRIS2=0 RFS1, 3RFS1,4RFS1, 5RFS1, 6+TRFS1=0 RFS2, 3RFS2,4RFS2, 5RFS2, 6+TRFS2=0 PP1, 5+TUP1, 5TOP1, 5=CAP1,5 PP1, 6+TUP1, 6TOP1, 6=CAP1,6 PP1, 7+TUP1, 7TOP1, 7=CAP1,7 PP1, 8+TUP1, 8TOP1, 8=CAP1,8 PP1, 5+TUP2, 5TOP2, 5=CAP2,5 PP1, 6+TUP2, 6TOP2, 6=CAP2,6 PP1, 7+TUP2, 7TOP2, 7=CAP2,7 PP1, 8+TUP2, 8TOP2, 8=CAP2,8 AppendixB: Thecompletesolutionofthesampleproblem Value 8000 8000 8000 8000 500 0 0 0 0 0 0 0 0 0 0 0 36500 0 0 0 28000 0 0 8000 35200 0 1200 Variable Value CD1,3,8 CD1,4,8 CD1,5,8 CD1,6,8 CIS1,5 CIS2,5 CIS3,5 CIS4,5 CIS5,5 CIS6,5 TCFS1 TCFS2 TCFS3 TCFS4 TCFS5 TCFS6 RD1,1,4 RD1,1,5 RD1,1,6 RD1,1,7 RD2,1,4 RD2,1,5 RD2,1,6 RD2,1,7 RD3,1,4 RD3,1,5 RD3,1,6 600 0 0 500 0 800 0 0 600 0 0 0 1000 0 0 1200 0 2000 500 1000 600 500 800 600 1000 1200 0 Variable CIS3,7 CIS3,8 CIS4,6 CIS4,7 CIS4,8 CIS5,6 CIS5,7 CIS5,8 CIS6,6 CIS6,7 CIS6,8 RIS1,4 RIS1,5 RIS1,6 RIS2,4 RIS2,5 RIS2,6 TPIS1 TCIS1 TCIS2 TCIS3 TCIS4 TCIS5 TCIS6 TRIS1 TRIS2 dh Value 7700 9500 8000 0 0 0 7900 0 0 0 0 8000 0 200 0 0 0 0 0 0 0 0 0 0 0 0 0 Variable CI5,5,6 CI5,5,7 CI5,5,8 CI5,6,7 CI5,6,8 CI5,7,8 CI6,5,6 CI6,5,7 CI6,5,8 CI6,6,7 CI6,6,8 CI6,7,8 RI1,3,4 RI1,3,5 RI1,3,6 RI1,4,5 RI1,4,6 RI1,5,6 RI2,3,4 RI2,3,5 RI2,3,6 RI2,4,5 RI2,4,6 RI2,5,6 PFS1,5 PFS1,6 PFS1,7 Value 28400000 0 8000000 11000 8500 9500 8000 36500 0 0 0 28000 0 0 8000 35200 0 1200 0 36500 0 0 0 36200 0 0 0 Variable
+ dp + dh + ds PP1,5 PP1,6 PP1,7 PP1,8 CP1,4 CP1,5 CP1,6 CP1,7 CP2,4 CP2,5 CP2,6 CP2,7 CP3,4 CP3,5 CP3,6 CP3,7 CP4,4 CP4,5 CP4,6 CP4,7 CP5,3 CP5,4 CP5,5 CP5,6
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0 36500 0 0 0 36200 0 0 0 18900 0 0 0 36500 0 0 0 28000 0 0 8000 35200 0 1200 0 36500 0 0 0 36200 0 0 0 18900 0 0 0 0 0 0 0
RD3,1,7 RD4,1,4 RD4,1,5 RD4,1,6 RD4,1,7 RD5,1,3 RD5,1,4 RD5,1,5 RD5,1,6 RD6,1,3 RD6,1,4 RD6,1,5 RD6,1,6 RD1,2,4 RD1,2,5 RD1,2,6 RD1,2,7 RD2,2,4 RD2,2,5 RD2,2,6 RD2,2,7 RD3,2,4 RD3,2,5 RD3,2,6 RD3,2,7 RD4,2,4 RD4,2,5 RD4,2,6 RD4,2,7 RD5,2,3 RD5,2,4 RD5,2,5 RD5,2,6 RD6,2,3 RD6,2,4 RD6,2,5 RD6,2,6 RIS1,3 RIS2,3 TRFS1 TRFS2
0 0 0 0 0 2000 0 4000 13000 7500 12500 7000 0 0 1000 0 0 11000 0 10500 9500 8000 0 11000 11000 11000 11000 11000 11000 8500 8500 8500 8500 8500 8500 9500 9500 9500 9500 9500 9500 8000 8000
TUP1,5 TUP1,6 TUP1,7 TUP1,8 TUP2,5 TUP2,6 TUP2,7 TUP2,8 TOP1,5 TOP1,6 TOP1,7 TOP1,8 TOP2,5 TOP2,6 TOP2,7 TOP2,8 ds PS1,5 PIS1,5 PS1,6 PS1,7 PS1,8 TPFS1 CD1,1,5 CD1,2,5 CD1,3,5 CD1,4,5 CD1,5,5 CD1,6,5 CD1,1,6 CD1,2,6 CD1,3,6 CD1,4,6 CD1,5,6 CD1,6,6 CD1,1,7 CD1,2,7 CD1,3,7 CD1,4,7 CD1,5,7 CD1,6,7 CD1,1,8 CD1,2,8
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2000 0 0 0 0 0 1000 0 0 0
PFS1,8 CFS1,5 CFS1,6 CFS1,7 CFS1,8 CFS2,5 CFS2,6 CFS2,7 CFS2,8 CFS3,,5 CFS3,6 CFS3,7 CFS3,8 CFS4,5 CFS4,6 CFS4,7 CFS4,8 CFS5,5 CFS5,6 CFS5,7 CFS5,8 CFS6,5 CFS6,6 CFS6,7 CFS6,8 RFS1,3 RFS1,4 RFS1,5 RFS1,6 RFS2,3 RFS2,4 RFS2,5 RFS2,6 PIS1,6 PIS1,7 PIS1,8 CIS1,6 CIS1,7 CIS1,8 CIS2,6 CIS2,7 CIS2,8 CIS3,6
18900 0 0 0 191500 0 0 8000 191300 0 0 8000 0 0 0 0 0 0 0 26000 0 0 17500 0 8000 7500 9500 0 0 0 0 8500 7700 8000 0 0 0 17500 0 8000 9000 0 0
CP6,3 CP6,4 CP6,5 CP6,6 RP1,1 RP1,2 RP1,3 RP1,4 RP2,2 RP2,3 RP2,4 RP2,5 dp PI1,5,6 PI1,5,7 PI1,5,8 PI1,6,7 PI1,6,8 PI1,7,8 CI1,5,6 CI1,5,7 CI1,5,8 CI1,6,7 CI1,6,8 CI1,7,8 CI2,5,6 CI2,5,7 CI2,5,8 CI2,6,7 CI2,6,8 CI2,7,8 CI3,5,6 CI3,5,7 CI3,5,8 CI3,6,7 CI3,6,8 CI3,7,8 CI4,5,6 CI4,5,7 CI4,5,8 CI4,6,7 CI4,6,8 CI4,7,8
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