Optimisation of the Automated buffer positioning model under DDMRP logic

Abstract

Abstract This paper discusses the buffer positioning problem in a hybrid Make-To-Order/Make-To-Stock (MTO/MTS) setting with deterministic lead times. With a more demanding market, delivery times have become more competitive. A dynamic amount of inventory is made immediately available at certain points of the manufacturing process, including the final product, allowing to improve the flow of materials and meet more competitive deadlines. This work is particularly interested in optimizing buffer positioning in the context of Demand Driven Material Requirement Planning (DDMRP), where the decision maker can process the location and the sizing of the inventory buffers in complex Bills of materials (BOMs) in the most efficient strategy all while minimizing inventory costs under service time constraint. To do so, an improvement of the existing model of the two first steps of DDMRP: the strategic inventory positioning and calculating the buffer levels, is proposed. A linearization of the model and better solutions in shorter computational times compared to the literature are given by the enhanced model which is proven through various simulations. A cost objective function was evaluated in this model, and was solved using CPLEX and its CP Optimizer. These simulations would prove a better and more efficient approach for an enhanced DDMRP implementation.