Adaptive Order Release Planning with Dynamic Lead Times

Abstract

An essential task in manufacturing planning and control is to determine when to release orders to the shop floor. One key parameter is the lead time which is defined as the planned time that elapses between the release of an order and its completion. Lead times are normally determined based on the actual duration that an order takes to traverse through the production system (flow times). Traditional order release models assume static lead times, although they should be set dynamically to reflect the dynamic operational characteristics of the system. Therefore, we present a cycle time estimation procedure to set lead times dynamically based on exponentially smoothed flow time forecasting. Additionally, we implement a safety lead time to incorporate the underlying cost ratio in the order release model. We use a simulation model of a three-stage flow-shop and show that our approach outperforms other forecast based order release mechanisms from literature.