How to Plan and Schedule for Profit: An Integrated Model and Application for Complex Factory Operations
Name
scm2020-silvestro-how-to-plan-and-schedule-for-profit-an-integrated-model-and-application-for-complex-factory-operations-capstone.pdf
Description
Full capstone
Size
4.1 MB
Format
Adobe PDF
Checksum (MD5)
6c3fe335051204bac5c76c1169266926
Author(s)
Silvestro, Alessandro
Date Issued
August 6, 2020
Abstract
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.
Subjects
Production planning
Inventory management
optimization
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