On the use of Simheuristics to Optimize Safety-Stock Levels in Material Requirements Planning with Random Demands

Barry B. Barrios, Angel A. Juan, Javier Panadero, Klaus Altendorfer, Andreas J. Peirleitner, Alejandro Estrada-Moreno

Research output: Chapter in Book/Report/Conference proceedingsConference contributionpeer-review

Abstract

Material requirements planning (MRP) integrates the planning of production, scheduling, and inventory activities in a manufacturing process. Many approaches to MRP management focus either on the simulation of the system (without considering optimization aspects) or in its optimization (without considering stochastic aspects). This paper analyzes a MRP version in which the demand of final products in each period is a random variable. The goal is then to find the optimal safety-stock configuration of both the product and the parts, i.e.: the configuration that minimizes the expected total cost. This total cost is given by: (i) the inventory cost; and (ii) a penalty cost generated by the occurrence of stock outs. To solve this stochastic optimization problem, a spreadsheet simulation model is proposed and a heuristic procedure is employed over it. A numerical example illustrates the main concepts of the proposed approach as well as its potential.

Original languageEnglish
Title of host publicationProceedings of the 2020 Winter Simulation Conference, WSC 2020
EditorsK.-H. Bae, B. Feng, S. Kim, S. Lazarova-Molnar, Z. Zheng, T. Roeder, R. Thiesing
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages1539-1550
Number of pages12
ISBN (Electronic)9781728194998
DOIs
Publication statusPublished - 14 Dec 2020
Event2020 Winter Simulation Conference, WSC 2020 - Orlando, United States
Duration: 14 Dec 202018 Dec 2020

Publication series

NameProceedings - Winter Simulation Conference
Volume2020-December
ISSN (Print)0891-7736

Conference

Conference2020 Winter Simulation Conference, WSC 2020
CountryUnited States
CityOrlando
Period14.12.202018.12.2020

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