Examining the impact of demand lumpiness on the lot-sizing performance in MRP systems

Material requirements planning (MRP) systems are designed to deal with production scheduling for products with lumpy demand patterns, as opposed to the continuous demand assumed in the classical inventory models. Past MRP lot-sizing studies concluded that the MRP system performance improves as the demand becomes lumpier. The purpose of this paper is to examine the impact of various degrees of demand lumpiness on the system performance of MRP systems by a simulation study. Results show that the performance improves to a certain extent as the demand becomes lumpier. However, the system performance starts to deteriorate when the demand pattern becomes extremely lumpy. MRP users should exercise caution in the introduction of demand lumpiness in the master production schedule (MPS) to induce a better MRP system performance. If a certain degree of demand lumpiness exists in the MPS as given in an operating environment, then the choice of an appropriate lot-sizing rule, such as the Silver-Meal algorithm, could take advantage of the impact of demand lumpiness.