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OR Spectrum

, Volume 39, Issue 1, pp 193–229 | Cite as

Integrated versus hierarchical approach to aggregate production planning and master production scheduling

  • Tom Vogel
  • Bernardo Almada-Lobo
  • Christian Almeder
Regular Article

Abstract

The hierarchical planning concept is commonly used for production planning. Dividing the planning process into subprocesses which are solved separately in the order of the hierarchy decreases the complexity and fits the common organizational structure. However, interaction between planning levels is crucial to avoid infeasibility and inconsistency of plans. Furthermore, optimizing subproblems often leads to suboptimal results for the overall problem. The alternative, a monolithic model integrating all planning levels, has been rejected in the literature because of several reasons. In this study, we show that some of them do not hold for an integrated production planning model combining the planning tasks usually attributed to aggregate production planning and master production scheduling. Therefore, we develop a hierarchical and an integrated model considering both levels, aggregate production planning and master production scheduling. Computational tests show that it is possible to solve the integrated model and that it outperforms the hierarchical approach for all instances. Moreover, an indication is given why and when integration is beneficial.

Keywords

Hierarchical production planning Integrated production planning Aggregate production planning Master production scheduling Rolling horizon planning 

Notes

Acknowledgments

The first author is grateful to Deutscher Akademischer Austauschdienst (DAAD) for awarding him a scholarship (Program ID: 57044990) and to Instituto de Engenharia de Sistemas e Computadores (INESC) Porto for fellowship AE2014-0185.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  • Tom Vogel
    • 1
    • 2
  • Bernardo Almada-Lobo
    • 2
  • Christian Almeder
    • 1
  1. 1.Chair for Supply Chain ManagementEuropean University Viadrina, Frankfurt (Oder)Frankfurt (Oder)Germany
  2. 2.INESC TEC, Faculdade de EngenhariaUniversidade do PortoPortoPortugal

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