| Modern enterprise is continuously making use of the innovational enterprise management software (Like SAP, Oracle), that to replace the complicated manual effort, to make the best and correct decision for the company. Material Requirement Planning (MRP) is the core functional component of Enterprise Resource Planning (ERP). So the effectiveness of the MRP result will directly influence the accuracy of the material planning strategy of the company.The Lead Time is treated as a known and stable parameter during the standard MRP algorithm for the calculation of the procurement and manufacturing plan. While in the real marketing, the lead time, especially for the procurement lead time, is always changeable and not stable. The range and tread of the change of procurement lead time is always highly dependent on the service level of the vendor.The new logic will treat the changeable lead time as the prerequisite that to do the multidimensional cost calculation in MRP. With simple mathematical speculation, a new and practical algorithm will be introduced to optimize the material planning strategy of the company that to find a golden balance among procurement cost, inventory cost and material shortage cost. The new algorithm will apply the Period Order Quantity (POQ) method in the Material Resource Planning (MRP). The unit purchasing cycle and safety stock (or safety lead time) will be the strategy parameter for the company. With the help of the algorithm, the best combination of the unit purchasing cycle and safety stock will be found that to minimize the total cost during the material planning.There are a series of system simulations for the new algorithm in the end part that to analyze the accuracy of the algorithm result for different marketing situations and one real example for one chemical company. The result shows that the new algorithm is effective and could help the enterprise to make the best purchasing strategy with the uncertain procurement lead time. |
PDF Full Text Request