Improving production planning through finite-capacity MRP

Abstract

Materials Requirement Planning (MRP) technique is widely employed by most manufacturing companies, even though field applications point out some weaknesses, including ignored production capacity constraints and fixed lead-times. These weaknesses often lead to infeasible production schedules, which trigger fluctuating workloads over time, significant adjustment effort and eventually unpredictably long lead times. This paper introduces a capacity-oriented MRP procedure that combines the traditional MRP procedure with an approach based on linear programming: in this way, requirement of lead times pre-determined a priori outside the MRP procedure is overcome. The new procedure is then applied to a real-life company and results highlight that feasible plans of orders are generated without requiring lead-times as input and without relevant computational burden.

Keywords:

• MRP
• linear programming
• capacity planning