Integrated versus hierarchical approach to aggregate production planning and master production scheduling

Tom Vogel (), Bernardo Almada-Lobo and Christian Almeder
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Tom Vogel: European University Viadrina, Frankfurt (Oder)
Bernardo Almada-Lobo: Universidade do Porto
Christian Almeder: European University Viadrina, Frankfurt (Oder)

OR Spectrum: Quantitative Approaches in Management, 2017, vol. 39, issue 1, No 6, 193-229

Abstract: Abstract The hierarchical planning concept is commonly used for production planning. Dividing the planning process into subprocesses which are solved separately in the order of the hierarchy decreases the complexity and fits the common organizational structure. However, interaction between planning levels is crucial to avoid infeasibility and inconsistency of plans. Furthermore, optimizing subproblems often leads to suboptimal results for the overall problem. The alternative, a monolithic model integrating all planning levels, has been rejected in the literature because of several reasons. In this study, we show that some of them do not hold for an integrated production planning model combining the planning tasks usually attributed to aggregate production planning and master production scheduling. Therefore, we develop a hierarchical and an integrated model considering both levels, aggregate production planning and master production scheduling. Computational tests show that it is possible to solve the integrated model and that it outperforms the hierarchical approach for all instances. Moreover, an indication is given why and when integration is beneficial.

Keywords: Hierarchical production planning; Integrated production planning; Aggregate production planning; Master production scheduling; Rolling horizon planning (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00291-016-0450-2

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