Capacity control policies for MRP systems

SUMMARY

Two types of heuristic capacity-control policies are evaluated using a simulation model of a materials-requirements-planning production system. The control-policy decisions are based solely on the size of the queue, as measured in standard hours of work, at each work centre in the production system. Several classes of product mixes and product structures and several levels of the control parameters of each policy, are investigated. The results indicate that each control policy gives rise to a unique population of weekly labour, work in process and intermediate inventory level. Product structure is identified as a major variable in materials-requirements-planning systems performance. Sensitivity analysis of the cost functions for each policy indicates the conditions under which it will minimize the sum of labour costs, work-in-process holding costs and inventory holding costs.