This thesis studies the practical application of material requirement planning(MRP) and evaluates various lot sizing techniques as applied to MRP.
In this study, MRP is extended to include the various lot sizing techniques to improve the overall system cost performance. Using this modified MRP, the order release schedule of each item pertinent to the given data can be obtained and the effective inventory control is made possible within a single framework.
To illustrate this modified approach, an automobile manufacturing firm is chosen as a case study. It was confirmed that the cost reduction is more remarkable with lot sizing techniques than without. Rather than applying a single lot sizing technique throughout the system the cost minimizing lot sizing technique is chosen for each production level by comparing the costs produced by each technique. In this way, a considerable cost saving was made possible, when compared to the results obtained by applying the single technique throughout. This confirms the common sense that the proper lot sizing technique should be chosen based in the demand characteristics, the cost structure and other relevant factors particular to each production level.
The approach take here is, in a sense, heuristic, but possesses the rich potential of practical application.
