SOLUTIONS. available on OLAT; else go to the library or to the department [at the secretary, or ask Stefan]):

Transcription

1 SOLUTIONS 1.2 Operations Management/Research Basics (see chapter 1-3 of Buzacott et al. 2013; parts are available on OLAT; else go to the library or to the department [at the secretary, or ask Stefan]): - What is the difference between simultaneous- and successive planning? What are the shortcomings of both approaches? Simultaneous planning=decision on all variables that are relevant to the problem simultaneously. Advantage = all interdependencies are considered. Disadvantage = solution time often longer than time to make the decision. Too complex to implement in practice. Sucessive planning=decision variables are determined consecutively. Disadvantage = interdependencies cannot be considered, global optimum cannot be reached, since entities optimize in isolation. Advantage = Due to complexity real systems are generally solved consecutively (planning systems follow a hierarchical approach). Easier to implement in practice. - What is the difference between make-to-order and make-to-stock systems? The difference is in the location of the customer-order decoupling point = Differentiation whether the production starts based on a forecast (produce to stock) or based on an order entry.

2 2 Calculations: 2.1 Forecasting: Period Month June July Aug Sep Oct Nov Dec Jan Feb Mar Apr Sales ? Calculate the forecast for April using: - The moving average method. For n= x T+1 = The single exponential smoothing (with alpha [smoothing parameter] between and forecast for March was 516). For alpha= x T+1 = Linear Programming A manufacturer produces two products (P1 and P2) on three resources (M1, M2, M3). The contribution margin of Product 1 is 30 and the contribution margin of Product 2 is 50. Product 1 requires 10 minutes of capacity of resource 1 and 14 minutes of capacity of resource 2. Product 2 requires 20 minutes of capacity of resource 1, 10 minutes of capacity of resource 2 and 10 minutes of capacity of resource 3. This example data is summarized in the following table.

3 Demand of capacity Available capacity Resource/Product P1 P2 M M M How much of which product should the manufacturer produce in order to maximize its contribution margin? Formulate and solve this problem by using a linear program. You may solve it graphically or you can use a software (Excel, Lindo, Lingo ). LINDO-Code MAX 30x x2!nebenbedingungen: SUBJECT TO M1) 10 x x2 <= 1200 M2) 14 x x2 <= 1050 M3) 10 x2 <= 500 END OF=3250 X1=50; x2=35 - If you could extent the capacity of one resource (e.g. by overtime), which one would you choose and why? Extent capacity of resource 1, because its dual price is the highest (2.222). - What would be meaningful extensions to this model (is it practical)? More periods, backorders, more stages, overtime depends on its usage, in practice this kind of models are used for mid-term planning in order to determine a Master Production Schedule which determines the quantities of the final products, and the amount of inventory and backorders of each product. 2.3 Material Requirements Planning

4 Company ABC industries produces one final product (A) which is built from two Components (C1 and C2) and two Parts (P1 and P2). The following Gozinto-graph shows the bill of materials. Note: The numbers 2/1 are defined as follows: The left number specifies the production coefficient (2 parts of C1 are required for 1 product A) and the right number specifies the lead time offset (Component C1 needs to be produced one period ahead of product A). Period Quantities final product A The initial inventories are: 250 for C1, 200 for C2, 0 for P1, 900 for P2 and 0 for P4. - Calculate the net material requirements for all components and parts (assume the lot-for-lot policy). Period Quantities final product A Gross requirements C Stock on hand C Net requirement C Gross requirements C

5 Stock on hand C Net requirement C Gross requirements P Stock on hand P Net requirement P Gross requirements P = = = Stock on hand P Net requirement P Gross requirements P Stock on hand P Net requirement P What is a lot size and are there any other lot-sizing policies that you know? Lot size=quantity of items produced together. Lot-size policies: Fixed order Quantity, Periodic order quantity, lot-for-lot Lot-sizing-models: Capacitated Lot Sizing Model, Wagner-Whitin 2.4 Inventory Control Next to the program-driven approach, company ABC industries calculates the material requirements for Part P3 with a consumption-driven approach. - Which inventory policies do you know, what is the difference?

6 Continuous Review Systems with fixed or variable order quantity Periodic Review Systems with fixed or variable order quantity Difference = Review instantaneously vs. e.g. once a week and order a fixed quantity (e.g., EOQformula) vs. order-up-to maximum stock of item. - How would you calculate the reorder point and the reorder quantity (provide a formula)? Reorder point: There are several formulas, e.g.: Reorder point=average demand during lead time + safety stock If we assume a normal probabitlity distribution: Safety stock = z-quantile*standard deviation of demand during lead time Reorder quantity=economic Order Quantity formula: EOQ 2* Demand *ordering costs costs of holding one unit of inventory - How would you decide on whether to use a program- or a consumption driven approach for calculating the material requirements? In general: One should make a ABC-analysis which categorizes the inventory into three categories based on its value, namely A = highest value, B=medium value, C=lowest value. For A-inventory items one should manage the inventories as exactly as possible (program-driven) For C-inventory items one should use the consumption-driven approach