Time bucket size and lot-splitting approach

We address the problem of lot splitting for various time bucket lengths in MRP systems. Two approaches for lot splitting can be applied: either use the same (equal) or a variable number of subbatches. Equal subbatching strategies have logistical and computational advantages. Literature states that variable batching strategies are only marginal better. However, these results do not take into account the sensitivity for changes in time bucket length. Managers have reduced time bucket lengths in planning systems. We examine the sensitivity of lot splitting for these changes. Our study reveals that it is not cost-effective to disregard time bucket length when deciding on the number of subbatches. Using the same number of subbatches per time bucket for all products results in substantial cost-differences, where the magnitude is affected by the discontinuity of the total cost curve. For a given time bucket length, a cost difference with a variable number of subbatches per operation of only 2.1% can be obtained if an appropriate, equal number of subbatches for each product can be found. Other equal subbatching strategies show much larger cost differences on average, ranging from 4-11%. In order to obtain these results, a new variable subbatch heuristic has been designed.