Evaluating the impact of lead time uncertainty in material requirements planning systems

This study uses simulation to examine the effects of lead time uncertainty on MRP system performance under various operating conditions. A full-factorial base experiment is first conducted to investigate how the effects of lead time uncertainty are influenced by such environmental factors as lot-sizing rule and product/cost structures. A subsequent validation experiment further examines the pattern of these effects under the variation of other environmental factors. Besides confirming experimentally that lead time uncertainty deteriorates MRP system performance, our results show that simpler lot-sizing rules such as the part-period-balancing and Silver–Meal rules can outperform the Wagner–Whitin algorithm in some operating conditions under lead time uncertainty. Our results also show that a neglected factor in earlier lot-sizing studies, the expected lengths of lead times, must be considered in studying the relative performance of lot-sizing rules in MRP systems with lead-time uncertainty.