Robust material requirement planning with cumulative demand under uncertainty

Abstract

In this paper, we deal with the problem of tactical capacitated production planning with the demand under uncertainty modelled by closed intervals. We propose a single-item with backordering model under small uncertainty in the cumulative demand for the Master Production Scheduling (MPS) problem with different rules, namely the Lot For Lot rule and the Periodic Order Quantity rule. Then we study a general multilevel, multi-item, multi-resource model with backordering and the external demand on components for the Material Requirement Planning (MRP) problem under uncertainty in the cumulative demand. In order to choose robust production plans for the above problems that hedge against uncertainty, we adopt the well-known minmax criterion. We propose polynomial methods for evaluating the impact of uncertainty on a given production plan in terms of its cost and for computing optimal robust production plans for both problems (MPS/MRP) under the assumed interval uncertainty representation. We show in this way that the robust problems (MPS/MRP) under this uncertainty representation are not much computationally harder than their deterministic counterparts.

Keywords:

• supply chain management
• MRP
• demand uncertainty
• robust optimization
• linear programming

Notes

No potential conflict of interest was reported by the authors.

Additional information

Funding

Paweł Zieliński was supported by Wrocław University of Science and Technology [grant number 0401/0086/16].