The Performance of MRP Purchase Lot-Size Procedures Under Actual Multiple Purchase Discount Conditions

ABSTRACT Several heuristic procedures for purchase lot sizing in material requirements planning (MRP) systems were tested with actual data from manufacturing companies. Information provided by the companies for each purchased item included the estimated requirements and costs, the price discount str...

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Bibliographic Details
Published in:Decision sciences 1989-06, Vol.20 (2), p.348-358
Main Authors: Christoph, Orinda Byrd, LaForge, R. Lawrence
Format: Article
Language:English
Subjects:
Discounts
Material requirements planning
Material Requirements Planning and Production/Operations Management
Operations research
Production scheduling
Statistical analysis
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Summary:ABSTRACT Several heuristic procedures for purchase lot sizing in material requirements planning (MRP) systems were tested with actual data from manufacturing companies. Information provided by the companies for each purchased item included the estimated requirements and costs, the price discount structure from the vendor, and the actual company ordering policy. Simulation tests for each purchased item involved comparisons of several purchase lot‐size procedures from the research literature along with the actual procedure used by the company providing the data. Results indicate that one of the heuristic lot‐size procedures from the literature consistently outperformed the company policies as well as all other models tested. Another noteworthy result is that, in some cases, the actual company order policy was more cost‐effective than some of the models from the research literature.
ISSN:0011-7315
1540-5915
DOI:10.1111/j.1540-5915.1989.tb01883.x