A tactical planning model for manufacturing subcomponents of mainframe computers

This paper describes a case study of the development and test of a tactical planning model for a discrete-part, high-volume production facility that produces subcomponents for mainframe computers. The facility is subject to several sources of stochastic variability. In this study the authors first described the production flow and control policies for the production facility. They then collected data on the production flows and analyzed the data to develop further insight into the operation and to decide upon how to model the production flow process. On the basis of their analysis, they implemented a linear-flow model of the shop. This model assumes that each production sector in the shop operates according to a linear control rule, which is parameterized by a planned lead time. The model characterizes the aggregate production flows that are necessary to achieve the planned lead times and meet production requirements. The authors demonstrate the use of the model for examining the trade-off between investments in work-in-process inventory and capacity, for setting planned lead times, for determining the benefits from eliminating variability in the shop, and for understanding the impacts on inventory and capacity requirements from changes in production mix, volume, or routing.