Aggregate order release planning for time-varying demand

Order release is the interface between the control of the material flow through the entire logistic chain and the control of the production units. Order release mechanisms based on the workload control concept usually are based on functional relationships of time averages of work-in-process, output, flow time, etc. This causes severe limitations especially in the case of time-varying demand. The paper shows that order release can be designed as a hierarchical system with aggregate order release planning as the upper level; aggregate order release planning determines the amount of released work in the planning periods and thus decides on the time-dependent state of the production units and on the balance between inventory variation and production level variation. A decision model for the optimization of aggregate order release is presented that takes into account the dependence of the work centre output on the work-in-process and therefore can be considered as a workload control method. Simulation results show the performance of the model. It is concluded that the optimization model leads to improvements over order release models currently available. Further improvements of the model, based on better integration of research on the transient behaviour of queuing networks, are a topic of future research.