Material and Labor Cost with Dynamic Lead Time

Abstract

The area of material required planning based on MPS system has had a lot of improvement done over time by various research considerably aspects of both inputs and outputs to the production system and even consider varieties with the production system which effect the overall efficiency of the system. Traditional Production control systems are based on the manufacturing planning concept and they do not sufficiently support the planner in solving production capacity problem, ignore capacity constraints and assume that lead times of many material are fixed, this leads to problems of shortfall in manufacturing, that cannot be resolved in the short term. The main focuses on solving these capacity problems by improving capacity planning at the material requirement planning level through integration of MRP and finite capacity planning. This results in a planning methods for simultaneous capacity and material planning. The planning method is based on a new and more accurate primary process model, giving the planning algorithm more flexibility in solving capacity problems. The algorithm is based on advanced scheduling techniques and uses aggregated information, thus combining speed and accuracy. This thesis has addressed the problem of capacity planning required form MRP by considering flexible lead times and also considering the strategy of making up for shortfall in production by POR of product from other manufacturer or have overtime if possible in production to make up for the losses. The cost incurred in making up for the material shortfall is also considered and makes management decision more informed about the cost implication.