Feedback and control for hierarchical production planning

This research develops and demonstrates a Hierarchical Production Planning System Simulator (HPPSS) for the analysis of feedback and control mechanisms between models at two particular levels within a computer-based Hierarchical Production Planning (HPP) system. These feedback and control mechanisms serve to reduce the effects of information asymmetry between the models at different levels of a hierarchy. The current work focuses on planning levels dealing with tactical decisions, with three areas distinguishing it from prior research. First, the HPPSS allows explicit examination of the effects of different information exchanges between the levels of a hierarchical model. To this end, a variety of feedback and control mechanisms for coordination of the two levels are made available in the HPPSS for comparative analysis using the same problem data. Second, the HPPSS allows examination of the problems for which a given feedback and control mechanism performs well (or poorly). For this purpose, the HPPSS is capable of generating and solving numerous problems for any of the available feedback and control mechanisms. Finally, the HPPSS allows the effects of a rolling horizon implementation on the hierarchical models of the production planning problem to be investigated. An example of the utility of the HPPSS is provided to show the potential benefits of increased planning horizon lengths, increased information exchange between levels, and looser control structures than presently emphasized in the HPP literature. The significance of the research is that a more thorough understanding of the costs and benefits of various mechanisms for information exchange between the levels of hierarchical models of planning problems over time will lead to improved hierarchical decision-making techniques that may influence the organizational design of the firm.