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Integrated versus hierarchical approach to aggregate production planning and master production scheduling

Author

Listed:
  • Tom Vogel

    (European University Viadrina, Frankfurt (Oder)
    Universidade do Porto)

  • Bernardo Almada-Lobo

    (Universidade do Porto)

  • Christian Almeder

    (European University Viadrina, Frankfurt (Oder))

Abstract

The hierarchical planning concept is commonly used for production planning. Dividing the planning process into subprocesses which are solved separately in the order of the hierarchy decreases the complexity and fits the common organizational structure. However, interaction between planning levels is crucial to avoid infeasibility and inconsistency of plans. Furthermore, optimizing subproblems often leads to suboptimal results for the overall problem. The alternative, a monolithic model integrating all planning levels, has been rejected in the literature because of several reasons. In this study, we show that some of them do not hold for an integrated production planning model combining the planning tasks usually attributed to aggregate production planning and master production scheduling. Therefore, we develop a hierarchical and an integrated model considering both levels, aggregate production planning and master production scheduling. Computational tests show that it is possible to solve the integrated model and that it outperforms the hierarchical approach for all instances. Moreover, an indication is given why and when integration is beneficial.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:orspec:v:39:y:2017:i:1:d:10.1007_s00291-016-0450-2
    DOI: 10.1007/s00291-016-0450-2
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    References listed on IDEAS

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    Cited by:

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    2. Akhtari, Shaghaygh & Sowlati, Taraneh & Griess, Verena C., 2018. "Integrated strategic and tactical optimization of forest-based biomass supply chains to consider medium-term supply and demand variations," Applied Energy, Elsevier, vol. 213(C), pages 626-638.

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