A Production–Inventory Model

for a Push–Pull Manufacturing

System with Capacity and
Service Level Constraints
Group 9:
Somesh Ajmera (2202215)
Shubham Antapurkar (2202208)
Srusti Sangeeta Baral (2201189)
Sharad Anuragi (2201170)
Shalini (2202196)
Agenda
01 Comparison of 8 forecasting methods
Naive, 2 period SMA, 3 period SMA, 3 WMA, Exponential Smoothing, Holt's
Linear Smoothing and Multiplicative Seasonality method with linear trend.

02 Calculate the measures of errors for each method

CFE, Bias MAD, MAPE, MSE, Std. Dev and Tracking Signal.

03 Comparison

Comparing the forecast methos on the basis of error measurement.

04 Conclusion

most appropriate to forecast the sales of soap for year 4.

 INTRODUCTION
9000

8000
No of cartiriges sold

7000

6000

5000

4000

3000

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1000

0
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Study Overview
Motivation : Production
planning for the hybrid system is
not much explored subject.
Researchers seek to fill this gap by providing
an optimization model for production planning
in a capacitated, hybrid push–pull system.
Study: Existing study provides
more general setting with multiple
Products having a set of
bills-of-material and the ATO
(Assemble to order) environment.
 Formulated an optimization that
deal with a hybrid push–pull
manufacturing strategy, complex
configured products, limited
manufacturing capacity, and
customer service level agreements.
 Two optimization models that both have significant
advantages over the common practice of applying a
quarter-to month spread ratio to derive the build plan
(production smoothing).
 Exploited the structure of the problem formulation
researchers have developed efficient numerical
algorithms that solves the problem optimally through
decomposition.
 Product-Based Optimization Model:

 Considering the build quantities at the

product level, and then use the MRP
Optimization explosion technique to obtain the build
quantities at the component level.

Models
 The optimization is to minimize the total
inventory cost while subject to
serviceability constraints

Component-Based Optimization Model:

 Considering the build quantities at the

component level directly.
 The objective is to minimize the total
component inventory cost.
 Minimizing the component inventory cost
provides incentives for not producing
more components in each period than
what is needed to meet the (product)
service-level requirements. H
 Computations
Method for
Optimizations
Decomposition Algorithm: A decomposition algorithm simplifies the computation involved
by exploiting the structure of the problem. It is backward-recursion algorithm that solves the
problem optimally through decomposition i.e.
decompose the problem into subproblems.

Sequential heuristic: starting with a just in time intake plan ,set the procurement quantity as
per the additional units to meet the cumulative service constraints, if feasible process is
optimal or else if infeasible continue the process at which production capacity is violated till
all constraints are satisfied.

Comparison

 Sequential heuristic produces close to optimal results reason being heuristic only takes into account the capacity constraints and ignores
other model parameters such as component costs, demand variability, and the nonlinear nature of the objective function.

 The small error of the decomposition method is due to the step size selected. The decomposition algorithm actually performs very well in
terms of the accuracy of the solution. The computation time of the decomposition algorithm is relative lesser than the nonlinear solver.
 Impact of
Production
Strategies

Impact of factors
on Build
Quantities
Impact of
production
capacity on
Inventory Cost
 Conclusion

This study deals with developing an

efficient numerical algorithms for
solving the non linear optimization
problems.
Improved capacity utilization, thus
reducing the risk and expense
associated with building up component
inventories in advance.
Decomposition method is more lucrative which
increases its application in different industries and
various problems like "reduction of carbon emission in
supply chain" and constraint on "transportation
capacity“.
Thank You
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