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.
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Acknowledgements
This research was supported by the National Science Foundation under Grant No.1029706. The opinions expressed in the article are those of the authors and do not represent the views of the National Science Foundation.
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Lin, PC., Uzsoy, R. (2016). Estimating the Costs of Planned Changes Implied by Freezing Production Plans. In: Rabadi, G. (eds) Heuristics, Metaheuristics and Approximate Methods in Planning and Scheduling. International Series in Operations Research & Management Science, vol 236. Springer, Cham. https://doi.org/10.1007/978-3-319-26024-2_2
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DOI: https://doi.org/10.1007/978-3-319-26024-2_2
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