An extended bill of material model for selecting production alternatives in a multi-routeing environment

Rapid changes in the market environment, customer demands and technological advancement all cause the traditional, closed-loop MRP approach to lose efficiency. This paper suggests a solution for companies in which an end product of the same quality can be produced in different ways. In such an environment changes could be accommodated by an extended (multi) bill of material. The present solution is based on the hypergraph approach for modelling and optimizing multi-bills of material in the MRP system, and achieves cost reduction while maintaining the quality and service levels required by the company.