Rolling horizon planning in supply chains: review, implications and directions for future research

Abstract

Due to their complexity and extensive application in industry, rolling horizon planning systems have received considerable attention in the literature. Of particular interest is the impact of different lot-sizing rules and policy variables on replenishment schedule cost and stability. Past research indicates that exact lot-sizing approaches may not perform the best in rolling horizon environments and that a single algorithm seldom performs well on both schedule cost and stability. In addition, a rolling horizon policy that performs well in one operating environment may perform poorly under different conditions. While rolling horizon research typically assumes a single planner, or planning layer, recent trends in outsourcing and global operations call for the study of supply chains that are characterised by multiple planning layers with information sharing and coordination among them. This article reviews the rolling horizon planning literature and synthesises the findings, extends the research taxonomy to include emerging research on supply chain systems with multiple planning layers and joint inventory replenishment, and provides several promising future research directions. This survey provides a starting point for anyone conducting research in this important research area.