Experiments with stock control policies and leadtime setting rules, using an aggregate planning evaluation model of a make-for-stock shop

Abstract

A simulation model, driven by real order time series, of an actual make-for-stock shop is described. A broad spectrum of different sets of decision rules has been incorporated in the model in an attempt to represent as many as possible of the production controls which might be utilized by a production manager. Experiments designed to determine the impact on a production cost function of changes in decision rules can be conducted over a wide range of conditions, with the objective of assessing the robustness of rule changes.

To illustrate the use of the model, the results of experiments in two areas of production control are presented. Changing the stock control policy used by the host company to a re-order level policy type was shown to lead to significant improvements in performance across the range of conditions examined, in the case of a low marginal cost of stock review. In experiments with leadtime setting rules, improvements in performance were obtained across the spectrum of experimental conditions when the leadtime distribution was altered to one based on batch work content and number of operations and the tightness of the mean leadtime was simultaneously increased.

Notes

K.M.G. Thomson McLintock, Finsbury Pavement, London, EC2, U.K.