Hierarchical Planning for Just-in-Time Deliveries

The just-in-time (JIT) delivery of products is a considerable challenge for many firms, because suitable planning methods have to be developed and practically installed. One main problem refers to the suppliers’ strategy, as they are no longer able to keep their optimal lot sizes and production rates due to customers’ reduced call-forward rates (cf. e.g. Fandel et al. 1988 and Fandel 1988). Thus, the suppliers have to choose different planning procedures in order to assure that there will be no avoidable in-process costs, as concerns particularly the production, inventory, and transportation of products. Obviously, there exist remarkable trade-offs between the design parameters of the whole process (cf. Reese 1991), which require a simultaneous optimization of all variables.