Designing a dynamic model to evaluate lot-sizing policies in different scenarios of demand and lead times in order to reduce the nervousness of the MRP system.

Abstract

The aim of this study is to provide a systematic approach to reduce the total cost and nervousness in material requirement planning (MRP) system based on appropriate lot-sizing policies under different scenarios of safety stock for demand and lead time. In this study, the system dynamics (SD) approach was utilized. The MRP system has been modelled and simulated and three scenarios were introduced: (1) stochastic demand-stochastic lead time, (2) stochastic demand-deterministic lead time, and (3) suggestion of the company. Four lot-sizing policies consist of a lot for lot, fixed order quantity, fixed period ordering, and economic order quantity was also evaluated under each scenario. The results showed that in scenario 2, the nervousness of the MRP system was at the highest level. Too, the lowest total cost in the situation of scenarios 1 and 2 has happened in the lot for lot policy, while it is for the suggestion of company related to fixed period ordering policy.

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