CASE STUDY ON MRP II

INTRODUCTION:
Lumpy demand forces capacity planners to maximize the profit of an individual factory as
well as simultaneously take advantage of outsourcing to its supply chain partners and even
competitors.
Capacity planners have to improve the usage of individual factory resources in order to
simultaneously optimize the company objectives and fulfill the demands.
Traditionally, the planners adjust the capacity of resources to fulfill demands by demand
management and capacity planning technologies such as overtime and subcontracting.
Among them, resource and order-sharing has becoming one of the significant tools for
achieving manufacturing flexibility and risk pooling in a supply chain.
OBJECTIVE:
1. What is the best cost-effectiveness portfolio and allocation of resources to fulfill orders?
2. How to develop a mutually acceptable resource allocation plan for individual factories
under the information asymmetry?
3. How is the performance of the proposed algorithm for solving this inter-factories capacity
problem?
SOLUTION METHODOLOGY:
This study proposes an ant heuristic algorithm to find an efficient resource port-folio plan in
which the resource investment decision, capital usage plan, resource configuration, and
task allocation are determined simultaneously.
The algorithm not only reduces the total cost of producing all orders but also improves total
profit in a factory level as well as the system level.
In many industrial situations, ant algorithm has been shown to offer successful solution
strategies for large and complex problems of production systems.
In the problem addressed in the study, negotiating parties require to re-examine capacity
plans frequently on the base of updated resource prices from its counter party. In this
regards, the ant algorithm provides excellent property in dealing with changing parameters.
EXPERIMENTS:
The parameters of the proposed MAA algorithm were carefully investigated and tuned in a
sensitivity analysis.
Major parameters include the evaporation rate (q, c), the number of artificial ant (Nants), the
number of reinforcement cycles (RF) and the number of cycles in a trial (C).
CONCLUSION:
This study has addressed the inter-factories capacity planning and resource allocation
problem.
It has developed three mixed integer linear programming models with the objective either to
minimize the total cost or to maximize the company profit of planning are source portfolio.
Issues that pertain to decisions to purchase, sell machines and allocate machines
economically to produce orders were resolved.
The other contribution of this study is to solve this complex resource portfolio problem by
proposing a modified ant algorithm with a repair mechanism, which enables artificial ants
always walk in feasible solution regions, reducing computational effort.
Furthermore, this study has developed a cooperation-based supply demand orchestration
framework in which the issues of coordinated resource allocation between factories tasks
can be resolved economically.
Experiments reveal that the proposed ant algorithm found good solutions in both of isolated
(a single factory level) and cooperation-based (at a mediator level) environments.