Improving production planning : a case study in a food company with seasonal demand

This project was motivated by the request of a Brazilian food company, which recognized the importance of improving the production planning process of its products with high seasonal demand. With the use of process-mapping tools and the hierarchical production planning framework, two main points of improvement were identified in the company with respect to its capacity planning and its aggregate production planning. The project addressed these points by developing two distinct decision-support models: a line-balancing model, based on simulation, and a production-planning model, based on Mixed-Integer Linear Programming. The line-balancing model reproduces the company’s existing production lines, and supports their rebalancing by allowing the company to predict their future operational performance derived from investments in new equipment. The production-planning model determines the monthly production, inventory and workforce levels that fulfill the company’s demand while maximizing its gross margin. Thus, the production-planning model provides the company a systematic way to work with aggregate data and production costs in its production planning. With effective use of these models, the company is able to make well-grounded decisions with respect to its capacity and aggregate production planning.