Production Planning and Inventory Control

Transcription

1 Production Planning and Inventory Control JOHN F. MAGEE Arthur D. Little, Inc. Cambridge, Massachusetts Institut fur PraWche Mathematik Hochschule istadr McGRAW-HILLjBOOK COMPANY, INC. New York Toronto London 1958

2 Contents 1. Inventory Control: Objective, Problems, and Systems 1 Introduction 1 Scope of the Problem 3 Economic and Social Implications of Inventory Management 4 Some Inventory-policy Questions and Problems 5 Practical Usefulness of Analysis Techniques 8 Inventory-control Systems 9 The Role of Forecasting 14 Limitations of Inventory Control Analysis of Inventory Functions 16 Inventories, Stock Points, and Operations 16 The Functions Inventories Serve 17 Sales Characteristics 80 Production Characteristics SI Lead Time Cost Factors in Production and Inventory Problems 24 The Importance of Costs 24 Principles of Cost Definition 24 Costs Dependent on Order Quantity 28 Production Costs 30 Inventory Costs 34 Capital Costs 36 Sales Costs 40 Clerical Costs 41 References Choosing the Size of a Manufactured or Purchased Lot 44 Common Practices 44 Case Example 46 Similar Cases, 48 Adjusting for Changes in Units 4^ Ordering Tabes 50 Nomograms 54 vii

3 viii Contents Other Cases 55 Manufacturing Runs 55 Several Products 56 Variations in the Regular Cycle 59 Quantity Discounts 61 Effect of Capacity on Run Length 66 Cost Factors Used 65 General Conclusions The Influence of Uncertainty 67 Uncertainty and Delay 67 Safety Stocks 68 Fixing the Quantity Ordered 69 Safety Stock in a Fixed-order System 71 Risk of Run-out, Service Failure 72 Relation between Safety Stock and Order Size 76 Definition of Components in a Fixed-order System 78 Systems with a Fixed-reorder Cycle 78 Concepts of Servo Theory 80 Application of Servo Techniques to Periodic Reorder System Analysis 81 Related Reorder Systems 83 Alternative Replenishment Flow Patterns 86 The Base-stock System 88 Comparison of Methods for Handling Uncertainly 94 Uncertainty in Production Cycling 96 Multiple-item Orders 98 Classification of Items Forecasting 105 Characteristics of Production-planning Forecasts 105 Forecast Timing 106 Forecast Detail 111 Explosions 113 Forecast Reliability 115 Using an Average and Estimate of Error 116 Maximum-Minimum Demand Forecasts 116 Responsibility for Forecast Uncertainty 117 Approaches to Forecasting 118 Collective Opinion 119 Economic Forecasts 121 Combination Methods 122 Statistical Methods 123 Control over Forecasts 129 Summary 131 References Production-planning Methods 133 Scope of Production Planning 133 Planning to Meet Seasonal Sales 134

4 Contents Sales Forecasts and the Planning Horizon 136 Specification of Production Requirements 137 Graphical Techniques 142 Linear-programing Methods 147 Controlling Production 153 Planning for Special Products 154 The Crash-sales Pattern 157 Reaching a Solution 159 ix 8. Control of Production Levels 162 A Rational Method for Getting into Difficulty 163 The "Thirty-day Sales" Rule 165 Elements of a Sound Control Plan 165 Production-control Rules 167 Choosing the Control Number and Period 175 Multistage Processes 176 An Example of Alternative Control Procedures 181 Methods in Development Scheduling Production 198 Forms of Production Organization 198 Exploiting Component Families 201 The Scheduling Function 203 Special-production Orders 205 Production Orders for Stock Items 212 Run-out List for Selecting Items 213 Run-out Lists with Economical Run Lengths 215 Adjusting Product Mix in Continuous Production 217 Assignment to Machine or Process-unit Groups 218 Using a Load Chart 219 Loading Step by Step 222 Gantt Charts 223 Forms of the Gantt Chart 226 Other Types of Loading Devices 226 Loading Sequenced Operations 227 An Illustration with Two Departments 228 An Application 233 Dispatching 235 Control over Complex Intermediate Operations 237 Product-line Control 239 Linear Programing in Production Scheduling 242 References Distribution Problems 243 Allocation and Stock-location Questions 243 Balancing Plants and Warehouses 245 Extensions to Other Cases 253 Graphical Techniques 255 Relation between Operating Level and Cost 259

5 x Contents Studying Changes in Capacity 261 Local Delivery of Small Orders 261 Local Service for Prompt Delivery 264 References Design of a Production-control System 268 Scope 268 Organizing to Design a Production Planning and Control System 269 The Analysis Team 270 The Supervisory Committee 271 Description of Operations 272 Existing Planning and Control System 274 Visual Descriptive Techniques 275 Products and Product Demand 282 The Explanation of Current Inventories 283 Decisions Needed 283 Required Forecasts 285 Costs 286 Development of the Proposed System 287 Product Codes 288 Testing the System 289 Simulation on Actual Demand 290 Monte Carlo Simulations 292 Shadow Operation 293 Partial Installation 293 Organizational Alternatives 294 Authority over Inventories 298 Control over System Operation 298 Procedures and Data-handling Methods 301 References 303 APPENDIX A: Derivation of Economical Order Quantity Formulas 305 Introduction 305 The Basic Case 305 Some Related Cases 306 The Multiproduct Case 310 Run Length and Capacity 312 References 316 B: Production-control Rules 317 Formal Statement of Control Rules 317 Effect of Control Number, k, on Inventory Requirements 318 Effect of Control Number, k, on Production Fluctuations 320 Magnitude of Production Adjustments 320 References 321

6 Contents C: Techniques of Seasonal Planning 322 Adjustment of Demand Forecasts 322 The Linear-programing Problem 325 The Production Plan as a Linear Program 325, Checking the Program 329 > References 329 INDEX 331 xi