Economic order quantity for multiple items in resource constraints

Abstract

In this paper we present a model and solution methodology for production and inventory management problem that involve space constraint. The model formulation is quite general, allowing organization to handle a variety of multi-item decision such as determining order quantities. With the growing interest in dealing with the volatile demand fluctuations, there is a renewed interest to enhance responsiveness in capacity planning and in particular, to address the dynamic changes in product mix. We propose a new representation for the capacity utilization. With a more refined representation, overlapping and non-overlapping, capability regions can be identified and their inter-relationships with respect to capacity can then be applied for improving the match between the capacity and production orders. Thus, better planning and capacity utilization can be achieved. An example is presented to demonstrate the proposed approach and summarizes the work on a user interface for an MRP II planning system which has been developed using artificial intelligence techniques as a support tool for the final user. Experiences with real applications show that the success of such a system depends on the flexibility and facility to acquire the knowledge through a correct model and the facilities for displaying results.