Finite capacity scheduling method for materials requirements planning with lot size restrictions

Materials requirements planning (MRP) is a widely used production scheduling technique in the manufacturing industry. Based on the projected demand and the corresponding product structure, MRP prescribes the periodic production quantities for every end-item, subassembly and component. The goal of MRP is to reduce the inventory cost while simultaneously ensuring that dependent demand relationships are met. In its basic form, the dependent demand explosion used by MRP to schedule production does not consider the availability of resources, consequently the schedule is often capacity infeasible. The MRP progressive capacity analyser (PCA) procedure in which finite capacity planning and lot sizing are performed concurrently with the MRP bill of material (BOM) explosion process is introduced. The PCA procedure is executed in four steps. It models the lot size multiple restriction and can be easily modified for other lot sizing rules. This method has been validated and tested for sensitivity to fluctuations in demand patterns and lot sizes. It has also been compared and shown to outperform a popular methodology used in practice.