Hierarchical Production Planning and multi-echelon inventory management

In this paper we present a framework for the planning and control of the materials flow in a multi-item production system. Our prime objective is to meet a prespecified customer service level at minimum overall costs. In order to motivate our study we first outline the basic architecture of a logistic control system developed at Philips Electronics. Guided by this exposure, we next describe the basic algorithmic framework which is needed to turn the conceptual ideas into operational procedures. The theory is product family level before disaggregating into plans for end-items.