Abstract

We consider the problem of planning future order releases in hierarchical production planning and control systems. An established research direction is the clearing function concept: The planned material flow through a production unit is modeled by inventory balance equations for WIP and final products, and the consequences of the stochastic properties of the material flow are modeled by clearing functions, which represent the functional relationship between the level of WIP and the maximum output of a work centre in a period.Theoretical insights suggest that modeling the output of a work centre in a period as a function of one independent variable is not sufficient for this type of models because of the time-varying transient states. This paper tests one- and two-dimensional clearing functions on simulation and empirical data obtained from a make-to-order production system. The fit of the clearing functions will be made by a regression through the origin and evaluated by the adjusted R2. The fits of the different clearing functions differ depending on the source of data. The possibilities for improvements by adding independent variables depend both on the period length and on the stationarity of the process. The findings lead to suggestions which additional independent variables should be added to a clearing function in order to improve the estimation of a work centre's future output and hence improve order release planning models.

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