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Hierarchical Planning Methodology for a Supply Chain Management

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  • Virna ORTIZ-ARAYA
  • Víctor M. ALBORNOZ

Abstract

Hierarchical production planning is a widely utilized methodology for real world capacitated production planning systems with the aim of establishing different decision–making levels of the planning issues on the time horizon considered. This paper presents a hierarchical approach proposed to a company that produces reusable shopping bags in Chile and Perú, to determine the optimal allocation of resources at the tactical level as well as over the most immediate planning horizon to meet customer demands for the next weeks. Starting from an aggregated production planning model, the aggregated decisions are disaggregated into refined decisions in two levels, using a couple of optimization models that impose appropriate constraints to keep coherence of the plan on the production system. The main features of the hierarchical solution approach are presented.

Suggested Citation

  • Virna ORTIZ-ARAYA & Víctor M. ALBORNOZ, 2012. "Hierarchical Planning Methodology for a Supply Chain Management," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 16(2), pages 14-18.
    • Handle: RePEc:aes:infoec:v:16:y:2012:i:2:p:14-18
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    References listed on IDEAS

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    1. Fleischmann, B. & Meyr, H., 2003. "Planning Hierarchy, Modeling and Advanced Planning Systems," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 36714, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
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    Cited by:

    1. Tom Vogel & Bernardo Almada-Lobo & Christian Almeder, 2017. "Integrated versus hierarchical approach to aggregate production planning and master production scheduling," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(1), pages 193-229, January.

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