A methodology for analysis and simplification of multi-level dynamic production lot sizing problems

When we try to design a production planning system for a manufacturing company, it is a time consuming task to analyze various planning activities and identify inter-relationship among a lot of decisions made for the production planning. Most of the research efforts have been concentrated on well-organized independent decision-making problems that may usually be identified only after analyzing the characteristics of the decision-making process as a whole. In this paper, a methodology is suggested to characterize the whole process of the production planning for a manufacturing company and reduce the complexity of decision-making problems. The methodology is based on an experience of developing a production planning software for an automobile component manufacturer in Korea. First, it is explained how to identify and represent the dependency among various decision-making variables. And a methodology is proposed to analyze the identified dependency among decision variables and identify decision-making process. Lastly, a practical example is provided to illustrate the analysis procedure in this paper.