Analysis of the dynamic rolling plan based enterprise resource optimization model

Paper Keywords: Management Science and Engineering; dynamic optimization model; rolling plan; Enterprise Resource Planning
Abstract: The traditional MRP logic inherent defects, ERP Production Planning modules in the system often can not meet the needs of rapid development of enterprises. Therefore, this paper presents a real-time forward, the optimal allocation of resources to achieve the new business enterprise resource planning system. core of the system is a dynamic rolling plan based enterprise resource optimization models. This paper discusses the introduction of the rolling cycle theory model for enterprise resource optimization methods and advantages. based on the model of the new system build more flexible and broader range of applications , the generated production plan more in line with actual production.

Introduction: Enterprise Resource Planning (Enterprise Resource Planning, ERP) is the world's most popular enterprise information software, unprecedented fierce competition in the information age, more and more companies start building their own ERP systems, and many companies can benefit from it. However, with increasingly complex economic environment, accelerate the pace of technological upgrading and complexity of enterprise business continues to expand, the shortcomings of traditional ERP revealed gradually limit the functionality of enterprise information systems to further expansion. to overcome the traditional ERP system inherent defect, the literature presents a logic to replace the traditional MRP Enterprise Resource Optimization System, which will MPS, MRP, and CPS functions rolled into one, through computer optimization, resulting in optimal allocation of resources to achieve the master production scheduling, materials requirements planning and capacity requirements planning. The new enterprise resource optimization system to solve the traditional MRP system for sequential allocation of resources resulting from the module conflict truly optimal allocation of corporate resources to overcome the inherent shortcomings of existing ERP systems.

And compared to the traditional model of enterprise resource planning, enterprise resource optimization model can also provide all the resources of the shadow price of enterprise (within the enterprise resources, opportunity cost) is to establish the internal market price of an important reference information. These price information based on marginal analysis In order to help companies to complete profitability analysis, production capacity bottleneck analysis, outsourcing of production cost analysis, value chain analysis, management decision-making analysis much better than the traditional accounting-based cost analysis of access to information. However, the current model for enterprise resource optimization is a point in time for the company worked out the static situation, in reality the model is applied to the enterprise, the company's overall production plan because the time dimension involved in a large, mostly for six months or a year, and plans to produce practical guidance you need accurate to weeks or days, leading to the large number of variables generated by the system, increasing the burden of solving the model, it should model combined with the actual production of the enterprise to go, but also involves the problem of a phased rolling plan. In this paper, Based on existing Research on the original model is improved enterprise resource optimization, proposed a plan based on rolling to the core enterprise resource optimization model for the new enterprise resource Dynamic Optimization System, the model optimization results more enforceable that can really optimize the function into a core module of ERP system.

Summary of the first part of this rolling plan and rolling cycle theory method, Part II presents a three-stage method of change rolling plan cycle, the third section describes the rolling plan based on enterprise resource optimization model and its numerical test, the fourth brief analysis of some of the dynamic advantages of enterprise resource optimization model.

1. Rolling plan and rolling cycle
Rolling program is one of the dynamic decision-making environment in the face of often used methods. Rolling plan is characterized as the planning is a continuous campaign to make timely changes in the whole scheme and developing. Since the project with internal and external conditions change constantly adjusted to make the scheme more flexible and adaptable. in the rolling plan, the entire project period is divided into N-planning cycle, and according to the initial period of the first cycle and enterprise resource state of the environment, to develop a N cycle of production plans. In the first cycle after the plan is executed, then the new internal and external environment and plan the actual implementation of a plan to develop the next N cycles of production planning, and so backward rolling cycle, which is the "rolling "the origin.

Rolling plan method in many disciplines are involved and Research, "it is the problem of planning theorists believe that a combination of planning and control factors, short-term and long-term plans to coordinate the appropriate framework." Initial Research appears in the economics . Goldman, Radner, Jo-hansen economic plan in the study were, in particular, made a rolling program of macroeconomic planning problem. such as Goldman's neoclassical growth model in continuous time optimal planning problem of the rolling, his method is Kaganovich called the adaptive rolling plan (the adap-tive rolling plans). Bala study proposed a new framework of a rolling plan, Kaganovich called the inter-cycle decomposition of decision-making mechanism (the machanisms of decentralization of intertemporal decisions).

Subsequently, the rolling plan approach into the production operation and management. The original production plan because the plan is not a good way, often through "short-sighted" approach to development. This method only considers the immediate resources, inventory, production, orders, etc. Although computationally efficient, but can not meet the long-term goals.

With the development and application of information technology, a lot of information can be obtained in real time, the computer's computational efficiency is also greatly improved, including all the information for the development to meet the long-term goals of the plan to create the conditions, resulting in long-term plan on the development and consider the problem of rolling Research. Benton and Srivastava, such as multi-stage production planning during the comparison experiments introduced the concept of a rolling program. Baker, Jaillet, Tareq in the inventory management, McClain and Thomas, Nagasawa, etc., Hastmut, Clark, Patriziza other in the production of program areas, Bean, Noon, and Salton in the cash management area, Ryan) in the areas of capacity expansion, Naphade and other areas in the shop scheduling introduced a rolling method.

2. Rolling plan method
The reality of the production process in the enterprise, the production plan is based on the actual situation of production and continue to advance according to a certain period, while under different management needs of multi-level sub-formulation, each level planning principles and objectives are not the same. This article Variable Cycle rolling plan proposed method combines the traditional rolling theory, the characteristics of hierarchical planning methods, in describing the process of production planning, while the rolling, to provide an optimized production plan.

To explain the process of rolling planning, the first part of a unified look at the terms used in this article later.

"Planning period" refers to the number of periods covered by the program plan (Plan period the total length of time), such as annual or quarterly plans;
"Planning cycle" refers to the planned unit of time, usually monthly, weekly, daily for the length of time;
"Rolling period" refers to the maximum covered by the program rolling planning cycle number;
"Planning cycle" for enterprises to develop (updates) the length of time production planning, business on a monthly, weekly, or planning a number of day cycle.

2.1 Fixed rolling cycle method of rolling plan
A typical rolling plan is fixed rolling cycle approach to planning, planning process shown in Figure 1. Describes the business planning cycle in the range of 8 to develop a rolling plan making process. Among them, the plan of the second rolling period = 4 (cycle ); planning cycle 1 (cycle); planning cycle 2 (cycle).


Rolling planning period fixed as follows:
The first step: companies develop a plan for the four planned cycles of the production plan, and organize production according to plan;
The second step: the completion of the two planning cycle of production, the re-development of new rolling plan, under the new plan covers a rolling cycle, the 3 - 6 cycles.

The third step: Repeat the second step of the mechanism of development of 4 - 8 cycles of the rolling plan.

Rolling plan method of a fixed period the advantages and disadvantages are very obvious, advantage is simple, the user can program the enterprise features, select the planning period length and the rolling method of rolling plan; the drawback is the length of a fixed program cycle, you can not Details of the plan take into account the production plan and forward-looking requirements. shorten the planning cycle can increase the level of detail plans, but the longer plans to consider the issue, planned phases will encounter too many difficulties caused by the contradiction between plans. But If the program planning cycle is too long will lose the level of detail. Therefore, the need to design a reasonable method of rolling plan to meet the needs of business plans for the following:
(1) both provide a more detailed production plans recently, but also an overall plan, taking into account longer range plan;
(2) from the operating level, operating level, management and other production plans from different perspectives;
(3) of the definition of a flexible plan, plan a small number of cycles, plans to develop high efficiency.

To meet the above requirements, need to use the multi-stage variable cycle rolling plan method.

More than 2.2 cycle of phase change method of rolling plan
Changing cycle of rolling plan, the planning cycles and rolling cycle length is variable, business plan level of detail according to the requirements of the planning stage and the rolling cycle of division. Hartmut rolling plan proposed a variation period model, he will be rolling cycle planning cycle is divided into three different stages, shown in Figure 2. from the current time last week to the "old" for the planning cycle (7 cycles), is the most detailed stage of planning; from the remaining part of the current month to the recent "week" for the planning cycle (3 cycles), the second is planned in detail stage; the remaining part of the year "month" for the planning cycle (11 cycles), is the most rough plan (not detailed) of the stage. This kinds of variable cycle rolling plan approach has 3 different planning cycle: day, week, month, only 21 planning cycle to complete the production planning. This method can be obtained when the daily implementation of the plan to develop a detailed production plan, but also take into account plans for a longer time perspective, to better meet the business needs of various production plans.


In the implementation of the rolling plan approach to consider when planning an important issue is how to scroll between the various stages and Cohesion. For example, the first phase of the daily program and the second phase of a weekly plan to converge, is the first such phase of the 7 days after the plans are executed and then the second phase of plans to expand the first week of plans for the day, or the day after the first phase of implementation of the plan is necessary to scroll back one day. The former method was carried out for every 7 days rolling, it will be the implementation of the error accumulation due to loss of accuracy of scheme; rolling calculation even though the latter approach is very timely, but obviously would undermine the integrity of the various stages of planning and program attributes of the natural calendar.

Draw on the idea rolling plan change period, taking into account the business plan in the development of the production base of habit calendar cycle, this paper presents a model for enterprise resource optimization rolling three-stage plan change period. This method is characterized not only to maintain the timeliness of a rolling plan, and try not to break up the natural calendar of the property. the rolling plan approach will also be planned in three phases, namely, monthly, weekly, daily plans for each phase. However, in each stage are provides for a re-enactment of this stage of a rolling plan of the programming cycle.

Figure 3 shows the rolling three-stage plan to promote the process of changing cycles in the diagram, where the first phase of the planning cycle for the month, the rolling plan of 4 cycles (months), plans to re-setting cycle is 1, that is updated monthly on the first phase of production plan. The second phase of the planning cycle for the week, rolling planning cycle is 8 (weeks), plans to re-setting cycle is 4, which re-enacted every 4 weeks, 8 weeks, a time span of the production plan. The first phase of each planning cycle length (4 months) for the second phase of the length of each planning cycle (8 weeks = 2 months) 2 times. The third phase of the planning cycle for the day, rolling plan for the 10 rolling cycles (assuming each week working 5 days), the programming cycle is 5 per 5 (1 week) re-enact a 10-day production schedule. the second phase of the length of each planning cycle (8 weeks) for the third phase of each planning cycle length (10 days = 2 weeks) 4 times.


The rolling forward the concrete steps are as follows:
(1) In the initial stage of the plan period, according to the division of three stages, namely, development of 4 months, 8 weeks and 10 at three different plans which the length of production planning;
(2) in the program implementation process, setting the stage by a rolling calculation of the programming cycle, for example, on the third phase of the plan, implementation of the 5 days after the need to re-development of the next 10 days of the date of intertemporal production plans In less than 5 days before the implementation date, according to the implementation of plans, where appropriate, to amend the existing day program (for example, the implementation of the scheme after 1 after 9 days of production plan corrected);
(3) to re-plan the second phase of the development cycle, Week 2, that when, two weeks after implementation of the plan to re-establish a period of 8 weeks across the production plan to achieve the purpose of rolling. In a week after implementation of the plan, but also can implementation of the plan, the production of 7 weeks after the plan amendment.

(4) The first phase of the re-enactment on plan period 1, that is calculated once a month rolling, re-enact a period of 4 months across the production plan.

2.3 cross-link method of periodic plan
Circadian cycles in a multi-stage approach based on a rolling plan, the enterprise resource optimization based on static models, we can set a different stage in each of the rolling cycle and the generation of detailed planning cycle, the degree of difference between the optimization of the production plan to meet the business different levels of demand.


To 2.2 in the three-stage rolling plan, for example, considered the first stage is the longest cycle of business planning phase, the output of the production plan on a monthly planning cycle, mainly for corporate senior management, can control the production The approximate running conditions; the second phase of a weekly planning cycle, the production plan is mainly business-oriented middle management. middle managers can grasp within 2 months may face, according to their own judgments to adjust the plan and to remind senior management of the risks faced; third stage is the day planning cycle, production planning major operations for the production layer. operating level staff can give the system within 2 weeks of the planned production, can also be based on the actual work experience within the allowable range fine-tuning to do to complete the scheduled tasks.

This three-stage variable cycle rolling optimization method takes into account a longer period of corporate resources to optimize, and staff at different levels according to business needs by providing information and analysis of different schemes, both to meet the needs of the organization of production, but also from the strategic level, to give decision support.

However, due to different stages of the cycle length of the different needs of various stages of convergence of the following methods:

Step One: Select the last phase of the cycle as the phase of several planned rolling cycle, such as 2.2 in the second stage of selecting four months of the 2 months as the phase of the rolling cycle.

Step Two: Get the stages of production information. This stage of the production of information from the previous phase of the production plan generated, which is the stage on a rolling cycle of one phase within the production plan. The plan was the production of information including material feeding time , the number of cases completed, inventory levels, which can be considered as the boundary of the stages of production.

The third step: According to the sophistication of this phase the requirements of the rolling cycle divided into a number of planning cycles, for example, 2.2 in 2 months the second stage is divided into 8 planning cycle, unit planning cycle for 1 week.

The fourth step: According to this phase of the rolling cycle, the planning cycle, production information at this stage of the optimization model building (construction method described below), students plan the cost of the production phase.

3. Based on a rolling plan optimization model for dynamic enterprise resource
Static enterprise resource optimization model can be adjusted to change the time period time period, we on this basis, a rolling plan on the basis of circadian principles to follow a few adjustments to the static optimization model, based on a rolling plan to form a dynamic enterprise resource optimization model.

3.1 Optimization model for a
Enterprise resource optimization with three-stage model and the rolling plan approach, the adjustment of the model summarized in Table 1. After adjustment, the new optimization model retains the original model's features, and more close to the needs of multi-stage rolling plan. Which The first stage model consistent with the original optimization model without the need to re-adjust.

Links to Research Papers Download http://www.hi138.com 3. 2 stages of a rolling plan optimization model

The first stage model (EROP-Pl) optimization model for the Central Plains with the literature (EROP-LP) agreed, in the appendix.

Second and third phase of the model definition is the same, but can still be used to stage more unified defined as follows:
No. N stage model (EROP-Pn): model of the basic variables and parameters of the original optimization model (EROP-LP) set the same (see Appendix), the following describes only the new parameters, variables. Model to adjust some of the objective function and Product demand constraints: Add subscript: that the first n-1 phase of the planning cycle; additional parameters: the first n of the results of a Phase 1; objective function

Goals into minimizing the cost of this phase, in which the cost of product demand constraints

The number of product demand and market demand, but about on a stage production to meet program requirements.

3.3 Model based optimization of a rolling plan application - A Case Study of Manufacturing Enterprises
The company initially established in 2004, ERP systems. As ERP core logic inherent flaw in the actual production, the company encountered some problems restricting further development of enterprises. We established according to the actual situation of enterprises that apply to the production process enterprise resource optimization model, and programming using ILOG Studio software, using CPLEX solution engine to solve it. We use real data of the enterprise a lot of numerical tests, the experimental data in Table 2. in the final product 50, 20 production cycle (in months) of the planning model, the Base can be obtained within 20 minutes on the optimal production plan. computer hardware platform, CPU Intel E6300 and memory IG �� 2.


But companies can not be based directly on the production plan for production, you need to model generates a daily production plan. In this case, the model cycle becomes too long, seriously affecting the efficiency of solving the model. To the final product 5, 12 month, for example, I were in accordance with the monthly, weekly, daily unit production for the optimal production plan period, the experimental results shown in Table 3.


This shows that in the case of products not large in scale, the model still can not directly produce the daily production plan. In this case, we introduce a rolling program approach. Established for the three stages of the business cycle optimization model for change , the period set in Table 4.



Our final product is still 5 and 12 months, for example, the rolling three-stage plan by the daily production plan generates. The results in Table 5, the total production by 5 minutes when the first 2 weeks every 12 days, the best the production plan.


4. Based on the dynamic rolling plan the advantages of enterprise resource optimization model
Dynamic rolling plan-based enterprise resource optimization model is the core of the ERP system can overcome the traditional ERP system can not achieve business shortcomings of optimal allocation of resources, and the original static optimization models, but also expanded the scope of application of the system, is more effective ERP system. The characteristics and advantages mainly in the following areas:
(1) to retain the original advantages of the static optimization model, optimal allocation of resources to play a role.

�� overall model to the objective of maximizing production and profits. Model the production according to the enterprise's internal conditions and external production environment optimize resource allocation, regulating the production load, bigger profits for enterprises to develop production plans.

�� model can optimize the product mix, reasonable arrangements for production, but also with production companies to develop outsourcing production planning, use of limited resources to produce maximum benefit for the enterprise products, the best allocation of resources.

�� The model can more accurately determine whether existing resources can meet business production of new orders and new orders for business impact. On this basis, companies can make more accurate and reasonable order selection.

(2) a dynamic model based on a rolling plan be more flexible in building suitable for a wider range.

�� enterprises in the actual production needs of the enterprise's production management means more than adopting a classification scheme, dynamic optimization model can be graded according to the needs of enterprises generate production plans and production plans for each level according to different objectives were developed, different levels the production plan according to the material balance of the linkage needs to ensure the overall consistency.

�� model can be based on actual production Fankui roll over to generate a new production plan, which makes the production plan generated at any time to reflect and meet the business was the production situation, to solve the traditional ERP system generates the production plan does not meet the corporate practice, executable and poor in problem.

�� multi-level model of linkage and completely rely on data-driven, the advanced model management techniques can automatically generate input data in line with actual production optimization models do not require operator personnel optimization model to handle specialized knowledge.

(3) dynamic model can provide more and more effective decision support.

Optimization of the dynamic model �� classification mechanism can provide enterprises with different stages of production information, for example, reflect the marginal cost of enterprise resource shadow price, based on its analysis of the resources at different stages of the degree of importance in the enterprise, in addition to the information makes the model can help companies to make long term decisions, but also can help companies make short-term adjustments. Also, because grading plan is developed, do not need to adjust the production of short-term changes in long-term production plan at any time, to keep production stable.

�� As the dynamic model enables companies to target classification according to different plans, which meet the needs of enterprise multi-objective management, so managers can better arrange production according to business needs. Reposted elsewhere in the Research Papers Download http:/ / www.hi138.com