A diagnostic study concerning large fluctuations in load plans and stocks at sales-production interface in a large switchgear company

The subject of the study underling this paper is master production scheduling for standard products in a switchgear plant. The master production scheduling was done by an assembly planning group, manually, and the groups stated policy was that it simply followed MRP logic, using an order-up-to policy, and that any deviations from this policy would be so insignificant that the group saw no need for specification for deviations. The manufacturing manager was far from convinced about the insignificance of deviations from MRP logic. He wondered whether too many deviations and adjustments were spoiling the system. Section 2 deals with derivation of a test of a hypothesis in this connection and finds that the fears of the manufacturing manager essentially agreed with the results of the statistical tests derived in this study. Some plausible reasons for short-sighted deviations from MRP logic are also mentioned. Section 3 concerns an objective scheme for damping forecast deviations from mean before they impinge on the production planning system.