An integer linear programming model to support customer-driven material planning in synchronised, multi-tier supply chains

This paper describes an integer linear programming model conceived as an alternative to a traditional material requirements planning (MRP) system for extending the concept of supply chain synchronisation upstream in a multi-tier supply chain. In this model, we assume there is an incumbent applicatio...

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Bibliographic Details
Published in:International journal of production research 2014-07, Vol.52 (14), p.4267-4278
Main Authors: Mula, Josefa, Lyons, Andrew C., Hernández, Jorge E., Poler, Raúl
Format: Article
Language:English
Subjects:
automotive sector
Information systems
integer linear programming
Integer programming
Inventories
Linear programming
Material requirements planning
Materials requirement planning
Mathematical models
MRP
OEM
sequenced and synchronised suppliers
Simulation
Stockpiling
Studies
Suppliers
Supply chain management
Supply chains
Transmission
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Summary:This paper describes an integer linear programming model conceived as an alternative to a traditional material requirements planning (MRP) system for extending the concept of supply chain synchronisation upstream in a multi-tier supply chain. In this model, we assume there is an incumbent application for transmitting original equipment manufacturer (OEM) requirements to first-, second- and third-tier suppliers. The proposed model is regarded as being embedded within a web-enabled, multi-tier, supply chain information system that provides the application for transmitting the production requirements. The principal motivation for having second- and third-tier suppliers that are synchronised with OEM and first-tier activity is the significant inventory, lead time and responsiveness gains that can potentially be achieved. Here, inventory is considered as a whole across a supply chain, and stock-outs are prohibited for the first-tier supplier. For illustration purposes, an example based on a real, automotive case study is provided. The model results proved better in terms of inventory and bullwhip reduction than those found in a previous simulation-based approach. Also, a comparison of the proposed case results with those of a conventional MRP application is provided.
ISSN:0020-7543
1366-588X
DOI:10.1080/00207543.2013.878055