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SUMMARY
This paper describes a production control plan which may be -used in a shop whose product line consists of numerous items which vary extensively in their demand pattern.
The plan is capable of: (a) stabilizing production by allowing inventories to fluctuate with moderate demand fluctuations; (b) minimizing inventories of finished goods while providing protection against serious Btockout; (c) detecting significant changes in demand patterns and revising production schedules accordingly; and (d) scheduling production economically.
Employing several well-known concepts, such as the control limits principle used in quality control, the plan considers simultaneously forecasted demand, forecast error, inventory position and shop capacity to arrive at production decisions. For this purpose, control limits are applied to both demand and inventory, and production is stabilized with a simple production smoothing procedure. Simulation results, based on data taken from a medium size production shop, demonstrate the plan effectiveness.
Overall, the paper emphasizes operational features rather than theoretical concepts, However, it is shown that the plan is amenable to generalized treatment.