Case Study Production Network Optimization
Modeling production systems from industry initially appears to be a straightforward exercise once the model to be used has been customized to reflect the peculiarities of the industry considered. Unfortunately, as also pointed out by many authors such as Pooley (1994, p. 116), Klingman et al. (1986, p. 11) or Brown et al. (1986, p. 227), collecting, preparing and validating the required data is often the greatest challenge. This issue is especially prominent in strategic applications because most of the data has to be forecasted for a long planning horizon and hence cannot be obtained directly from accounting or ERP systems. As also noted by Billington and Davis (1992, p. 587), insufficient data availability is probably a main reason for the reluctance of practitioners from industry to employ optimization models to support strategic planning. The complexity inherent in setting up the data structure for strategic supply network design models is also illustrated by the few publications actually describing the data compilation process (e.g., Geoffrion et al. 1978).
KeywordsCash Flow Network Design Decision Support Tool Production Network Scenario Planning
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