How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations
In the manufacturing industry, short-term production planning and scheduling requires multiple trade-offs to account for service targets, capacity utilization, setup, on-time delivery, costs and profit. If many SKUs flow in the same production line, the challenge is how to plan and schedule in suc...
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| Format: | Other |
| Language: | en_US |
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2020
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| Online Access: | https://hdl.handle.net/1721.1/126501 |
| _version_ | 1826210052942331904 |
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| author | Silvestro, Alessandro |
| author_facet | Silvestro, Alessandro |
| author_sort | Silvestro, Alessandro |
| collection | MIT |
| description | In the manufacturing industry, short-term production planning and scheduling requires multiple trade-offs to account for service targets, capacity utilization, setup, on-time delivery, costs and
profit. If many SKUs flow in the same production line, the challenge is how to plan and schedule in such a way that an optimal trade-off between customer service, operational performance, and cost of goods sold can be achieved while maximizing gross profit. This research project provides a novel mixed integer linear model formulation that optimizes lot sizes in a CG factory such that manufacturing capacities and efficiencies, production, inventory, holding and setup costs are considered simultaneously while maximizing the expected profit. The model solves a multi-echelon production and inventory network and quantifies the advantages by comparing different baselines. The model application evaluated against the simulated Sponsor Company reference baseline proves to be on average 4% more profitable every week, in a quarter of a year period, in the most conservative scenarios. The scenario analysis provides interesting managerial insights into what to expect when
improvement efforts focus on minimum production lots, decoupling buffers or less-than-full deliveries and how they increase even further the overall profitability. |
| first_indexed | 2024-09-23T14:40:55Z |
| format | Other |
| id | mit-1721.1/126501 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T14:40:55Z |
| publishDate | 2020 |
| record_format | dspace |
| spelling | mit-1721.1/1265012020-08-18T20:29:29Z How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations Silvestro, Alessandro Production planning Inventory management optimization In the manufacturing industry, short-term production planning and scheduling requires multiple trade-offs to account for service targets, capacity utilization, setup, on-time delivery, costs and profit. If many SKUs flow in the same production line, the challenge is how to plan and schedule in such a way that an optimal trade-off between customer service, operational performance, and cost of goods sold can be achieved while maximizing gross profit. This research project provides a novel mixed integer linear model formulation that optimizes lot sizes in a CG factory such that manufacturing capacities and efficiencies, production, inventory, holding and setup costs are considered simultaneously while maximizing the expected profit. The model solves a multi-echelon production and inventory network and quantifies the advantages by comparing different baselines. The model application evaluated against the simulated Sponsor Company reference baseline proves to be on average 4% more profitable every week, in a quarter of a year period, in the most conservative scenarios. The scenario analysis provides interesting managerial insights into what to expect when improvement efforts focus on minimum production lots, decoupling buffers or less-than-full deliveries and how they increase even further the overall profitability. 2020-08-06T20:42:56Z 2020-08-06T20:42:56Z 2020-08-06 Other https://hdl.handle.net/1721.1/126501 en_US application/pdf |
| spellingShingle | Production planning Inventory management optimization Silvestro, Alessandro How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations |
| title | How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations |
| title_full | How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations |
| title_fullStr | How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations |
| title_full_unstemmed | How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations |
| title_short | How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations |
| title_sort | how to plan and schedule for profit an integrated model and application for complex factory operations |
| topic | Production planning Inventory management optimization |
| url | https://hdl.handle.net/1721.1/126501 |
| work_keys_str_mv | AT silvestroalessandro howtoplanandscheduleforprofitanintegratedmodelandapplicationforcomplexfactoryoperations |