| This work aims at developing an advanced planning system (APS) for production planning and inventory control for small-to-medium enterprises (SMEs). The aim is to incorporate this APS in the overall supply chain management software system for SMEs to be developed subsequently. Specifically, this research attempts to develop a system to optimally combine aggregate planning (AP) and master production schedule (MPS) with the materials requirement planning (MRP) and the capacity requirement planning (CRP), which are usually performed jointly by SMEs, due to their size and their typical make-to-order or assembly-to-order production environment. The resulting model is a relatively large mixed 0–1 integer program. Benders Decomposition is applied. The simplex method is customized to solve the lower-level subproblem, which determines production quantities in each period. A special n-step look-ahead algorithm is devised to solve the minimax 0–1 integer program in the master problem. The proposed APS is tested using a set of test problems generated to reflect various structures of bill-of-materials, set-up vs. unit production costs, and the length of planning horizons. |
