BATCH SIZE OPTIMIZATION

PROJECT INCLUDES:

• Plant Simulation

IMEG was hired by an industry leading manufacturer of pumps to evaluate optimal WIP levels and changes in inventory costs for a high-cost component.

THE PROBLEM

  • Uncertainty in the accuracy of current inventory levels
  • Undefined Overall Equipment Effectiveness (OEE)
  • High setup costs & high material costs
  • One shared machine resource with 49-part numbers in varying batch sizes & setup times
batch size optimization
reorder, batch size

THE PLAN

  • Develop a Simul8 simulation on the shared resource to evaluate queue sizes in different scenarios including:
  • Changes in OEE
  • Changes in inter-arrival time
  • Changes in warm-up time
  • Analyze number of stock-outs in the different scenarios
  • Use the outputs of the plant simulation to guide further analysis using a non-linear optimization
  • Calculate the ideal number of batches to produce per year for each part number
  • Deliver optimal batch sizes to reduce inventory levels

simulation cost

THE RESULTS

  • Delivered a simulation modeling the shared resource and all part numbers for a whole year matching a previous year’s unit output
  • Provided safety stock, reorder, and max inventory levels based on current, alternate, and optimal batch sizes
  • Highlighted recommended areas to change batch sizes based on current state discrepancies

simulation reorder

batch size optimization

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