Uncertainty%20and%20Production%20Planning%20Dec%202008

Uncertainty and - December 2008 Uncertainty and Production Planning Stephen C Graves MIT 77 Massachusetts Avenue E53-347 Cambridge MA 02139-4307

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December 2008 Uncertainty and Production Planning Stephen C. Graves MIT 77 Massachusetts Avenue, E53-347 Cambridge MA 02139-4307 [email protected] The intent of this chapter is to review and discuss how uncertainty is handled in production planning. We describe and critique current practices and then prescribe possible improvements to these practices. In particular, we argue that there are a set of tactical decisions that are critical to the proper handling of uncertainty in production planning. We observe that current planning systems do not provide adequate decision support for these tactical decisions; we regard this shortcoming as an opportunity for new research and development, which could significantly improve the practice of production planning. The chapter is based primarily on personal observations of production planning practices in a variety of industrial contexts. As such it is written more as an essay than as a scientific research article. We make no effort to review or survey the research literature on production planning under uncertainty; we do provide a commentary on the research literature, and identify a few points of entry for the interested reader. We also cite a few illustrative references, albeit primarily from our research. Similarly, our observations on practice are not the outcome of a carefully designed field study, but rather are derived from a potpourri of projects over many years. Again, our intent is to provide a framework and set of observations on current practice, and to provoke some new thinking on how we might do better.
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We organize the chapter into five sections. In the first section, we briefly describe and discuss major sources and types of uncertainty, how these uncertainties get realized and how these uncertainties affect the production plan. In the second section, we provide a commentary on the research in production planning as it relates to the theme of this chapter. We note that much of the research literature is based on deterministic models, and does not explicitly account for uncertainty. With regard to the research that does include uncertainties, we discuss its applicability and the challenges to transfer to practice. In the third section, we introduce a stylized framework for describing current production planning systems; the intent here is to provide a basis for the subsequent discussion and critique of production planning under uncertainty. In the fourth section, we make a series of observations on the generic treatment of uncertainty in production planning in practice, and note that most systems for production planning do not recognize or account for uncertainty. Yet these systems are implemented in uncertain contexts; thus the planning organizations need to develop coping strategies. We describe and critique the most common coping strategies.
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This note was uploaded on 04/11/2011 for the course ECE 357 taught by Professor Subjolly during the Spring '11 term at National University of Ireland, Galway.

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Uncertainty and - December 2008 Uncertainty and Production Planning Stephen C Graves MIT 77 Massachusetts Avenue E53-347 Cambridge MA 02139-4307

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