PRODUCT STRUCTURE COMPLEXITY AND MULTILEVEL LOT SIZING USING ALTERNATIVE COSTING POLICIES*

W.C. Benton · Rajesh V. Srivastava

35 citations0/0 files storedDecision Sciences

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Supply Chain and Inventory Management Management and Optimization Techniques Scheduling and Optimization Algorithms

Abstract

ABSTRACT This research evaluates the effect of product structure complexity on the performance of several lot‐sizing procedures in a multilevel manufacturing environment. The experiment compares two different costing policies, full value added (FVA) and marginal value added (MVA), for calculating inventory holding cost. The major finding of the research is that product structure complexity has very little effect on the performance of various lot‐sizing procedures. A second finding is that when product structures with varying components per parent and stocking points for a particular end item are present, the MVA costing policy emerges as the policy of choice because it favors slightly the Silver‐Meal (SM)/least‐total‐cost (LTC) procedures over the Wagner‐Whitin (WW)/LTC procedures.

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References

2004Optimal Policies for a Multi-Echelon Inventory Problem 1960Optimal Policies for a Multi-Echelon Inventory Problem 1984Manufacturing Planning and Control Systems 1986Decision systems for inventory management and production planning 1978Material Requirements Planning 1973Economic Lot Size Determination in Multi-Stage Assembly Systems 1982The impact of a rolling schedule in a multi‐level MRP system

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1993Effects of Product Structure Complexity on Multi‐level Lot Sizing*2010A generic coordination mechanism for lot-sizing in supply chains 1998Planned Lead Times in Multistage Systems 1988Location of Inventories in an MRP Environment

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