Note---On "A New Look at Production Switching Heuristics for the Aggregate Planning Problem"

Roger C. Vergin
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Roger C. Vergin: Simon Fraser University

Management Science, 1980, vol. 26, issue 11, 1185-1186

Abstract: Several papers have been published which present simplified models for the aggregate planning problem which do not yield optimal schedules. They are typically supported with computations that suggest that the resulting schedules produce costs within a few percent of optimum. This note suggests that those cost comparisons have been made against inappropriate base costs which include a large fixed cost element. When these models are compared using only the controllable variable costs, costs that appeared to be only one or two percent over minimum turn out to be as much as twenty to thirty percent over the costs resulting from optimal solutions.

Keywords: planning; inventory/production: production smoothing (search for similar items in EconPapers)
Date: 1980
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