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A fuzzy approach to capacity constrained MRP systems*

J. Mula R. Poler J.P. García-Sabater

CIGIP (Research Centre on CIGIP (Research Centre on CIGIP (Research Centre on
Production Management and Production Management and Production Management and
Engineering) Engineering) Engineering)
Polytechnic University of Valencia Polytechnic University of Valencia Polytechnic University of Valencia
Plaza Ferrándiz y Carbonell, 2 Plaza Ferrándiz y Carbonell, 2 Campus de Vera, s/n
03801 Alcoy (Alicante) 03801 Alcoy (Alicante) 46022 Valencia
fmula@cigip.upv.es rpoler@cigip.upv.es jpgarcia@cigip.upv.es

ambiguous data. For a detailed description of MRP,

Abstract
A model for the Material Requirement
Planning (MRP) problem with uncertainty
in a multi-product, multi-level and multi-
period manufacturing environment is
proposed. An optimization model that takes
into account the ambiguity in market
demand, ambiguity in capacity data, and
ambiguous costs for delayed demand is
formulated. This work uses the approach of
fuzzy programming proposed by Gen,
Tsujimura and Ida [4]. Such an approach
makes it possible to model the ambiguity
that could be present in the MRP systems
as triangular fuzzy numbers. The main goal
is to determine the master production
schedule, stock levels, delayed demand,
and capacity usage levels over a given
planning horizon in such a way as to hedge
against the uncertainty. Finally, the model
is tested using real data from an automobile
seat manufacturer.
Keywords: MRP, Uncertainty modelling,
Fuzzy sets.
1 Introduction
In this paper, for the purpose of demonstrating the
usefulness and significance of the fuzzy
programming for production planning, a fuzzy
approach is applied to a MRP problem with
the reader is referred to Orlicky [11] and Vollman,
Berry and Whybark [12].
In fuzzy programming, the ambiguous coefficients
and vague aspirations are represented by fuzzy sets
[13]. Inuiguchi and Ichihashi [6] classify fuzzy
programming approaches into three categories: (i)
mathematical programming with vagueness, (ii)
mathematical programming with ambiguity, and (iii)
mathematical programming with vagueness and
ambiguity. The first type of fuzzy programming is
called flexible programming and the last two types
of fuzzy programming are called possibilistic
programming.
In this paper, with the aim of showing the usefulness
and significance of MRP modelling with fuzzy
programming, an approach of possibilistic
programming is applied to a MRP problem. The
main contribution of this paper to the operational
research field is a practical application of known
possibilistic programming, accompanied by
experiments based on real data. Other applications
of possibilistic programming in production planning
problems can be found in [5] and [7].
This paper is organized as follows. Firstly, in
Section 2, a model for production planning in a
capacity constrained MRP system with ambiguous
data is presented. In Section 3, the fuzzy model is
transformed into an equivalent crisp model. Section
4 uses a real-life study case to illustrate the potential
savings which can be attained by using fuzzy models
in a fuzzy environment. In section 5, this paper
offers some conclusions.

*
This research has been carried out in the framework of a project funded by the Science and Technology Ministry of
the Spanish Government, titled ‘Business process integration, knowledge management and decision support tools in
supply chain of industrial SMEs’. Ref. DPI2002-01755. www.gnosis.cigip.org.

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2 Formulation of the problem Billington, Mcclain and Thomas [2] although the
setup times have not been included. The decision
A Linear Programming (LP) model for the capacity variables Tocrt and Texrt are not limited by any
constrained MRP problem originally proposed in [9]
established parameter but are penalized with the
and called MRPDet is adopted as the basis for our
corresponding costs in the objective function. This is
work. MRPDet is a model for the optimization of the
to provide the most possible generality to the model.
medium term production planning problem in a
The limitation of these variables for specific
capacity constrained MRP, multi product, multi applications could be easily considered taking into
level and multi period manufacturing environment. account that if those limits are exceeded the solution
Equation (1) shows the total costs to be minimized: of the model could be no feasible.
costs of the inventories cii, costs of the extra time
A constraint has also been added (4) to finish with
used by resources, ctexrt, and costs of the lazy time
the delays in the last period (T) of the planning
of resources, ctocrt. The MRPDet includes a plan to horizon.
satisfy the delayed demands penalized with a cost,
crdi. It is assumed that this cost is linear to the The model also contemplates the non negativity
number of backlogs in every period. constraints (5) for the decision variables.
The balance equations for the inventory are given by Finally, the decision variables Pit, INVTit and Rdit
the group of constraints (2). These equations take will be defined as continuous or integer variables
into account the backlogs of the demand which depending on the manufacturing environment where
behave as a negative inventory. It is important to the model is applied.
highlight the consideration of the parameter RPit that Let us consider the following fuzzy formulation of
guarantees the continuity of the MRP along the the MRPDet model. Decision variables and
successive explosions carried out during a given parameters for the model are defined in Table 1.
planning horizon.
The production in every period is limited by the
availability of a group of shared resources. The
equation (3) considers the limits of capacity of these
resources. This equation has been thought in a
similar way that in the model proposed by
I T
 ~
 R T
Minimize z = ∑∑ cp P
 i it + cii INVTit + crd i Rd it  + ∑∑ (ctocrt Toc rt + ctexrt Texrt ) (1)
i =1 t = 1   r =1 t =1
Subject to
I
~
INVTi ,t −1 + Pi ,t −TSi + RPit − INVTi ,t − Rdi ,t −1 − ∑ aij ( Pjt + RPjt ) + Rdit = d it i = 1…I, t = 1…T (2)
j =1

I ~ ~
∑ AR
i =1
ir Pit + Toc rt − Tex rt = CAPrt r = 1…R, t = 1…T (3)

RdiT =0 i = 1…I (4)

Pit, INVTit, Rdit, Tocrt, Texrt ≥ 0 i = 1…I, r = 1…R, t = 1…T (5)
~ ~ ~
where crd i = (crdi1, crdi2, crdi3), d it = (dit1, dit2, CAP rt = (CAPrt1, CAPrt2, CAPrt3) are positive
~ triangular fuzzy numbers (TFNs).
dit3), AR ir = (ARir1, ARir2, ARir3) and

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Table 1: Decision variables and model parameters.

Sets
T Set of periods in the planning horizon (t = 1…T)
I Set of products (i = 1…I)
J Set the parent products in the bill of materials (j = 1…J)
R Set of resources (r = 1…R)
Decision Variables Data
Pit Quantity to produce of the product i on period t dit Market demand of the product i on period t
INVTit Inventory of the product i at the end of period t a ij Required quantity of i to produce an unit of the
Rdit Delayed demand of the product i at the end of product j
period t
Tocrt Undertime hours of the resource r on period t TSi Lead time of the product i
Decision Variables Data
Texrt Overtime hours of the resource r on period t INVTi0 Inventory of the product i on period 0
Objective Function Cost Coefficients Rdi0 Delayed demand of the product i on period 0
cpi Variable cost of production of an unit of the RPit Programmed receptions of the product i on period
product i t
cii Inventory cost of a unit of the product i Technological Coefficients
crdi Delayed demand cost of a unit of the product i ARir Required time of the resource r for unit of
production of the product i
ctocrt Undertime hour cost of the resource r on period t CAPrt Available capacity of the resource r in the period t
ctexrt Overtime hour cost of the resource r on period t

3 A fuzzy programming model

The operator used to aggregate the fuzzy objective
The approach of Gen, Tsujimura and Ida. [4] is a function and constraints is the min-operator [1]. The
generalized transformation method that is applicable
solution of the fuzzy problem may be achieved
to any type of fuzzy constraint and objective
solving the following mathematical programming
function (maximization or minimization), where the
problem:
fuzzy parameters are represented by TFNs which
membership function is defined in [4] as:

 1
 r − r ( x − r2 ) + 1
 2 1 if ( r1 ≤ x ≤ r2 )
 1
µ r ( x) =  ( x − r2 ) + 1 if ( r2 ≤ x ≤ r3 ) (6)
 r2 − r3 if ( x ≤ r1, r3 ≤ x )
 0


I T
  R T
∑∑  + + − α + α it  + ∑∑ (ctocrt Tocrt + ctexrt Texrt )
Minimize z = cp P
i it cii INVTit ((1 ) crd i1 crd i2 ) Rd (7)
i =1 t =1   r =1 t =1
Subject to
I
INVT i ,t −1 + Pi ,t −TS i + RPit − INVT i ,t − Rd i ,t −1 − ∑ a ij ( Pjt + RP jt ) + Rd it ≤ (1 − α ) d it 3 + αd it 2 i = 1…I, t = 1…T (8)
j =1

I
INVT i ,t −1 + Pi ,t −TS i + RPit − INVT i ,t − Rd i ,t −1 − ∑ a ij ( Pjt + RP jt ) + Rd it ≥ (1 − α ) d it1 + αd it 2 i = 1…I, t = 1…T (9)
j =1

∑ ((1 − α ) AR
i =1
ir1 + αARir 2 ) Pit + Tocrt − Texrt ≤ (1 − α )CAPrt 3 + αCAPrt 2 r = 1…R, t = 1…T (10)

∑ ((1 − α ) AR
i =1
ir 3 + αARir 2 ) Pit + Tocrt − Texrt ≥ (1 − α )CAPrt1 + αCAPrt 2 r = 1…R, t = 1…T (11)

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RdiT =0
Pit, INVTit, Rdit, Tocrt, Texrt ≥ 0
where 0 ≤ α ≤ 1 is a cut value. In order to solve the
problem α is settle down parametrically to obtain the
value of the objective function for each one of those
α ∈ [0, 1]. The result is, however, a fuzzy set and the
planner have to decide that pair (α, z) considers
optimal if he wants to obtain a crisp solution.
4 Implementation and resolution
The models have been implemented with a high
level language for mathematical programming
models, the modelling language MPL [8].
Resolution has been carried out with the
optimization solver CPLEX [3]. Lastly, the input
data and outputs of the models are managed through
a Microsoft Access 2000 database.
5 Application in an automobile seat company
This section uses a real-life example to illustrate the
potential savings which can be attained by using
fuzzy models in a fuzzy environment. The proposed
models are applied in a firm that manufacturing and
assembling seats for automobiles.
The hypotheses to carry out the computational
experiment are summarized as follows:
• The study considers a single part (with its
bill of materials).
• The decision variables, Pit, INVTit and Rdit
are integer.
• External demand only exists for the final
product.
• Backorders of the delayed demand for the
final product PNR are considered.
• Only the productive resource restricts the
production: the assembly line.
• For the fuzzy model, the parameter α is a cut
value (0 ≤ α ≤ 1) with a step of 0.1.
~ of 30 weeks.
• Also, the fuzzy cost coefficient, crd i =
(crdi1, crdi2, crdi3), the fuzzy right-hand-side
~ weeks updating the demand values, the
number, d it = (dit1, dit2, dit3), and the fuzzy
~ programmed receptions of components.
technological coefficients, AR ir = (ARir1,
~ The detailed data of this computational experiment
ARir2, ARir3) and CAP rt = (CAPrt1, CAPrt2,
550
i = 1…I (12)
i = 1…I, r = 1…R, t = 1…T (13)
CAPrt3), required by the fuzzy model have
been defined following company criteria.
For instance, in the case of the demand
information:
o dit1 is obtained by decreasing 10%
the value of dit2,
o dit2 is considered the demand
information received by the
company,
o dit3 is obtained by increasing 10%
the value of dit2.
• They are not considered production
variations by quality or machine failures.
• It has been considered a six months planning
horizon with a weekly period planning.
• The planned orders are recalculated in every
planning period, while the programmed
receptions of the components are considered
‘firm’.
• The execution performance indicators for
each MRP explosion are: production,
inventory, delayed demand and overtime
costs.
The company receives (daily) from the OEM the
demand information with a planning horizon for six
months. However, these demand forecasts are rarely
precise (see [10]). Therefore, this section will
validate if the fuzzy model for production planning,
proposed in this paper, can be a useful tool for the
decision making process of the production planners.
The experiment has been carried out on a PC, with
AMD Athlon processor at 2600 MHz and with 256
MB of RAM memory, in the following way:
• It considers the technical and economic
information of the part. Moreover, the
demand information for a planning horizon
• Each MRP is executed for each one of the
inventory, the delayed demand and the
and the MPL models can be found in Mula (2004).
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The evaluation method consists on the comparative In the case of the fuzzy model that provides a fuzzy
analysis of the performance of the two models, i.e. solution, the fuzzy set of the decision has been
the fuzzy model and the deterministic model, obtained. Next, it has been chosen as crisp solution
according to a group of parameters defined in [9]: (i) which obtains the best results in the highest number
the total costs; (ii) the service level; (iii) the levels of of the evaluated indicators. Along this section it will
inventory; (iv) the planning nervousness respect to only be considered for this model the selected crisp
the planned period and the planned quantity (see solution, where the parameter α was established at 0.
Table 2); and (v) the computational efficiency
(Table 3).
Table 2: Evaluation of the results.
Number of
minimum Planning Planning
Service Inventory nervousness nervousness
Model level (%) levels (period ) (quantity) Total costs (€)
MRPDet 99.44 8 0.35 14.05 3.988.276,07
Fuzzy MRP 99.49 19 0.35 13.50 2.938.857,69

Table 3: Efficiency of the computational experiments for a MRP execution (first week).
Array
Elements Density CPU Time
Model Iterations Variables Integer Constraints non zero (%) (seconds)
MRPDet 0 4237 5612 2797 8239 0.07 0.86
Fuzzy MRP 0 4237 5612 2857 8477 0.07 3.74

Both models present an average service level above
99.5% The fuzzy model provides a lightly better
value in this performance indicator. Contrarily, the
fuzzy model generates a higher number of minimum
inventory levels, i.e. 19 from the 46 evaluated items
present lower inventories with the production plans
obtained by the fuzzy model in contrast with the 8
items with lower inventories provided by the
MRPDet model.
Both models have presented a similar nervousness
with respect to the planned time period. On the other
hand, the fuzzy model presents the best value of
nervousness with respect to the planned quantity.
Also, the fuzzy model generates lower total costs
than MRPDet. These differences in the total costs
are due, mainly, to two aspects: (i) The
consideration of possible future variations of the
demand that originates larger production and
inventories with the objective of avoiding the
strongly penalized demand backlogs, and (ii) the
strict constraints of the deterministic model, where
the required capacity and the available capacity of
the assembly line are fixed rigidly.
Finally, the fuzzy model has provided freedom of
action with regard to problems where ambiguous
values appear with a minimum increment of the
requirements of information storage and a moderate
increment of the required CPU time.
6. Conclusions.
In many manufacturing environments, such as the
automobile industry, the production planning
decisions have to be made under conditions of
uncertainty in parameters as important as costs,
market demand or capacity data.
A model based on fuzzy mathematical programming
for production planning under conditions of
uncertainty has been proposed. In a general way, the
structure of the fuzzy model has been able to
increase the group satisfaction (level of service,
inventory levels, planning nervousness and total
costs) without causing an explosive growth of the
computational effort.
Presented the research conclusions to the company,
the staff in charge of planning have shown their
interest in the new model that it would allow them to
consider in a better way the demand variability and
to introduce their perceptions.
References
[1] Bellman, R. and Zadeh, L.A., “Decision-making
in a fuzzy environment”, Management Science,
vol. 17, pp. 141-164, 1970.

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