A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization

Stephen C. Graves, David B. Kletter and William B. Hetzel
Additional contact information
Stephen C. Graves: Massachusetts Institute of Technology, Cambridge, Massachusetts
David B. Kletter: Booz, Allen & Hamilton Inc., New York, New York
William B. Hetzel: Merck & Co., Inc., Whitehouse Station, New Jersey

Operations Research, 1998, vol. 46, issue 3-supplement-3, S35-S49

Abstract: This paper develops a new model for studying requirements planning in multistage production-inventory systems. We first characterize how most industrial planning systems work, and we then develop a mathematical model to capture some of the key dynamics in the planning process. Our approach is to use a model for a single production stage as a building block for modeling a network of stages. We show how to analyze the single-stage model to determine the production smoothness and stability for a production stage and the inventory requirements. We also show how to optimize the tradeoff between production capacity and inventory for a single stage. We then can model the multistage supply chain using the single stage as a building block. We illustrate the multistage model with an industrial application, and we conclude with some thoughts on a research agenda.

Keywords: Inventory/production; multi-item; multi-stage supply chain with uncertain demand and dynamic forecast revisions; application to film production; dynamic requirements planning and supply chain optimization (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (47)

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