Applying Simheuristics for Safety Stock and Planned Lead Time Optimization in a Rolling Horizon MRP System under Uncertainty

Material requirements planning (MRP) is one of the main production planning approaches implemented in enterprise resource planning systems, and one that is broadly applied in practice. Since customers' demands evolve over time, the MRP method is usually applied in a rolling horizon planning, in which a safety stock and a planned lead time is usually employed to reduce the negative effects of uncertainty components in the production system or in the customers' demands. Considering uncertainty conditions in a rolling horizon planning leads to additional difficulties in determining the optimal planning parameters. In this paper, a multi-stage and multi-item production system is simulated by considering random customers' demands and other sources of uncertainty. With the goal of minimizing the sum of inventory and backorder costs, a simheuristic algorithm is proposed and tested.