01 + 02_Production Networks and Plant Location Flashcards
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Strategic Planning
Production Networks and Plant Location
Tactial Planning
Design of Production Systems:
- job shop
- flow show
- cellular manufacturing
Operative Planning
- Demand Forecasting
- Master Production Scheduling
- Material and capacity requirements planning
Demand Forecasting
Operative Planning
- prediction of the future development of the demand
Master Production Scheduling
Operative Planning
- planning and coordination of production schedules for various production sites of a company
Material and Capacity requirements planning
Operative Planning
- Planning of detailed requirement quantities, lot sizes, due dates
Classic Transportation Problem
- multiple production locations
- multiple customer regions
- Optimization Problem: Determine minimum cost transportation quantities
Vogel’s approximation method
- minimize the maximum additional costs for not selecting the optimum supplier or destination
- using additional costs incurred by selecting second best (instead of best) supplier or destination as a priority rule for the selection of transportation links
Assumptions Vogler’s approximation
- single period
- single product
- only transportation and plant specific production costs considered
- linear cost structure
- all plant-to-customer zone assignments feasible
- unlimited transportation capacities
Reasons for opening new plant
- increasing capacity
- modernization
- entering new markets
- growth of free trade zone
- lower labour costs
- strategic issues
- benefitting from exchange rate trends
Classical Transportation Problem
How many constraints are modeled?
5 rows; 4 columns
5 + 4 = 9
- including the non-negativity constraints 9 + (4x5) = 29
There are 5 potential plant sites of which 3 have to be chosen:
How many iterations of Vogel’s approximation do you need to perform?
n! / r! * (n-r)!
5! / 3! x (5-3)!
120 / (6x2) = 10