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Abstract
The following work proposes the development and application of a materials planning model for the industry of refrigerating drinks. The model is applied to dependent demand in which a Material Requirements Planning (MRP) method is used. The materials planning model is a combination of basic sources of uncertainty that affects MRP system demand and supply uncertainty. The appropriate values of key management parameters used to buffer against uncertainties, safety stock and safety time, are set according to the source of uncertainty. The model performance was tested for historic data and compared with real inventories levels.
1.Introduction
MRP has been proven effective for manufacturing planning and control, although managerial aspects can be improved to enhance the performance of MRP systems (X. Zhao et al., 15).
One of the main advantages of an MRP approach is that inventory systems with dependent demand should not required safety stock below the end-item level. Supposedly, safety stock is not needed because dependent demand systems found the demand directly from production plans once the master schedule has been establish. Practically, however, bottleneck process or one with varying scrap rates can cause shortages in downstream operations. Furthermore, shortages may occur if assumptions of constant replenishment lead time are made (Waters, 1). Random fluctuations in demand occur because of variations of fabrication or assembly times. Likewise, the replenishment lead time often varies due to machine breakdowns, material shortages, or transportation delays in the factory and distribution operations. The way of dealing with these sources of uncertainty in an MRP system is to identify all the activities or operations that are subject to variability and to determine the extend of that variability (Stevenson, 16).
It is well known that the performance of an MRP system depends on the adequacy of the master schedule. MRP system "nervousness" is commonly defined as minor changes in the master schedule or MRP plans for the higher level items (Vollmann, 17). Those changes can propagate downward through the product structure and produce significant changes in the planned order releases for lower level items. Changes can involve the quantity or timing of planned orders and can often cause disruptions in production, insufficient supply of raw materials, or components parts. The combination of the sources of uncertainty with the MRP system "nervousness" implies the use of buffering mechanisms to protect the manager's against uncertainties.
Safety stock and safety time are two basic ways to buffer uncertainty in a MRP system. The first method specifies a quantity of safety stock determined from statistical inventory control techniques. The second, plans order releases earlier than indicated by the requirements plan and schedules their receipt earlier than the required due date.
Whybark and Williams (176) developed a model to show the way in which MRP systems reveal preference for using either safety stock or safety time, depending on the category of uncertainty to be buffered. According to simulation experiments, when exists timing uncertainty the concept of safety time instead of safety stock is preferable. When quantity uncertainty is involved, higher service levels are achieved by use of safety stocks. However, Buzacott (14) concluded that safety time is preferable to safety stock when there is a good forecast of future requirements. He also said that, safety time tends to lose his attractiveness over safety stock if changes of requirements over the lead time occur. Finally, his work indicates that safety stock is preferable to safety time when the master schedule can predict with low effectiveness the future requirements.
In this paper we develop a model for a dependent demand system controlled by a MRP in which are uncertainty and instability effects.
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