Estimating the Costs of Planned Changes Implied by Freezing Production Plans

Po-Chen Lin () and Reha Uzsoy ()
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Po-Chen Lin: North Carolina State University
Reha Uzsoy: North Carolina State University

Chapter Chapter 2 in Heuristics, Metaheuristics and Approximate Methods in Planning and Scheduling, 2016, pp 17-44 from Springer

Abstract: Abstract The use of production planning algorithms on a rolling horizon basis is very common in practice. However, this leads to frequent changes in planned quantities for future periods which may adversely impact support activities such as material preparation, staffing, and setup planning. In this chapter we examine two widely used approaches for this problem, the use of change costs to penalize changes in planned quantities and freezing of the plan by prohibiting any changes in some number of periods in the near future. We use a linear programming model of a single-product single-stage system to develop insights into the conditions when the two approaches are equivalent. Specifically, we derive lower bounds on the values of the change costs which will ensure freezing of the plan in a given planning epoch, and present numerical results to illustrate our findings.

Keywords: Rolling horizon; Production planning; Nervousness; Change costs; Freezing (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-319-26024-2_2

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DOI: 10.1007/978-3-319-26024-2_2

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