Setting planned leadtimes in capacity requirements planning

This paper deals with the problem of determining planned leadtimes in a periodic loading system, such as ‘Material Requirements Planning.’ A method for determining planned leadtime for an individual job, based upon the operation time for the job, is presented from the standpoint that the planned leadtime should be determined under a management policy, taking a trade off between work-in-process quantities and capacity requirements variations into consideration. The proposed method, which is derived with Lagrange’s method of indeterminate coefficients, can minimize capacity requirements variations under a given average loading time, under general operation time distributions.