A hierarchical production plan for a make-to-order steel fabrication plant

Abstract

A three-tiered hierarchical production plan (HPP) for a strictly make-to-order steel fabrication plant with the objective of developing a production plan and master schedule for a set of product archetypes is implemented. Data are collected from an actual steel fabrication plant located in the Midwestern section of the US. An aggregate linear programming model, a non-linear disaggregate model and a master production schedule comprise the respective tiers. Appropriate models provide the forecasts needed in the first two tiers. A production plan and master schedule based on data collected at the plant, benefits expected for its implementation and practical limitations are reported.

Keywords:

• Hierarchical production planning
• scheduling
• linear programming
• production planning

Acknowledgments

Brian D. Neureuther is an Assistant Professor of Operations Management at Indiana State University. He received his PhD in Production and Operations Management from Texas Tech University in 1999, his MBA degree from Wright State University in Dayton, Ohio, with a concentration in management science in 1996, and his BA in mathematics from SUNY Geneseo in 1992. His research interests include simulation, quality control, the theory of constraints, service operations management, and mathematical modeling. He is a member of the Production and Operations Management Society, the Institute for Operations Research and Management Science, and APICS. His work has appeared in journals such as Decision Sciences, Journal of Integrated Design and Process Science, Quality Management Journal and Effective Teaching.

George G. Polak is an Associate Professor in the Department of Management Science and Information Systems at Wright State University in Dayton, Ohio. He holds a PhD in Mathematics from Carnegie-Mellon, and completed a Postdoctoral Fellowship in Operations Management in the College of Business Administration at the University of Cincinnati. His research interests include machine scheduling and combinatorial optimization, as well as supply-chain modeling and optimization, and network flows. An article that he co-wrote with Michael Magazine of the University of Cincinnati was accorded the Best Paper Award for the focus issues on Design and Manufacturing for 2002–2003 by the IIE Transactions Editorial Board and the Institute of Industrial Engineers. His work has also been published in a number of volumes and journals, including Naval Research Logistics Quarterly, Networks, Journal of Electronics Manufacturing, O.R. Letters and the European Journal of Operational Research. He is active in the Institute for Operations Research and the Management Sciences (INFORMS) and its affiliated honour society, Omega Rho, at both the local and national levels.

Nada R. Sanders is Professor of Operations Management at the Raj Soin College of Business at Wright State University. She received her PhD and MBA from the Ohio State University. Dr Sanders is the author of numerous articles that have appeared in journals such as Decision Sciences, Journal of Business Logistics, Sloan Management Review, Omega, Interfaces, International Journal of Production and Operations Management, Journal of Behavioral Decision Making, and others. She has written chapters for books and encyclopedias and is co-author of the book Operations Management. Her research interests include supply-chain management, third-party logistics, the role of information technology in the supply-chain environment, and business forecasting.