A tactical planning model for make-to-order environment under demand uncertainty
Teo, Chee Cheong
Date of Issue2005
College of Business (Nanyang Business School)
Singapore-MIT Alliance Programme
We consider production smoothing in a make-to-order (MTO) manufacturing environment that has a firm delivery lead time. We model the fundamentals of the tactical planning process in the MTO environment. In the model, a stochastic demand process represents a dynamic input into the master production schedule. Consequently the schedule gets converted into job release, and the jobs flow between the workstations in the production system. We model the production system as a job shop as it represents the most generic form of process structure. Our job shop model is based on the Tactical Planning Model (TPM) of Graves (1986), in that it is a discrete time, continuous-flow model and uses linear production functions for the output of the workstations.