A production planning system for plastic footwear in a seasonal market

Abstract

Modern injection-moulding machinery which produces several, pairs of plastic footwear at a time brought increased production planning problems to a factory.
The demand for its footwear is seasonal but the company's manning policy keeps a fairly constant production level thus determining the aggregate stock. Production planning must therefore be done within the limitations of a specified total stock.
The thesis proposes a new production planning system with four subsystems.
These are sales forecasting, resource planning, and two levels of production scheduling: (a) aggregate decisions concerning the 'manufacturing group' (group of products) to be produced in each machine each week, and (b) detailed decisions concerning the products within a manufacturing group to be scheduled into each mould-place.
The detailed scheduling is least dependent on improvements elsewhere so the sub-systems were tackled in reverse order. The thesis concentrates on the production scheduling sub-systems which will provide most. of the benefits.
The aggregate scheduling solution depends principally on the aggregate stocks of each manufacturing group and their division into 'safety stocks' (to prevent shortages) and 'freestocks' (to permit batch production). The problem is too complex for exact solution but a good heuristic solution, which has yet to be implemented, is provided by minimising graphically immediate plus expected future costs.
The detailed problem splits into determining the optimal safety stocks and batch quantities given the appropriate aggregate stocks. It.is found that the optimal safety stocks are proportional to the demand. The ideal batch quantities are based on a modified, formula for the Economic Batch Quantity and the product schedule is created week by week using a priority system which schedules to minimise expected future costs. This algorithm performs almost optimally.
The detailed scheduling solution was implemented and achieved the target savings for the whole project in favourable circumstances. Future plans include full implementation.

Date of Award	Sept 1976
Original language	English