Hierarchically integrated lot size optimization

The paper describes a new hierarchically integrated approach to improve conceptual deficiencies of traditional Production Planning and Control Systems for a make-to-stock job shop production. The main concern is a restructuring of traditional planning levels and an improvement of their hierarchical interdependence. Thus, already at the medium term planning level lot sizes are determined which, in the traditional concept, is a task of the MRP-module. The hierarchical interdependence is not simply a top-down relationship, but is supplemented by an explicit anticipation of the lower levels. Considering the information status at the medium term level the job shop is described as a queueing network and the lot sizes are obtained minimizing simultaneously mean lead time, (medium term) capacities, and (short term) inventories. The approach is computational feasible and, based on some numerical results, is compared with a deterministic multi level capacitated lot sizing model.