Abstract: The invention comprises a method for achieving consideration of preemptive priorities within a supply chain optimization model. More specifically, the invention provides a method of allocating resources to a hierarchy of demand priorities in a linear programming production planning system. In particular, the invention aggregates the demand priorities into different priority groups and allocates the resources to the highest priority group of demand priorities using a first linear programming model. Next, the invention allocates remaining resources to the next highest priority group of demand priorities using a second linear programming model. The second linear programming model uses results from the first linear programming model. The invention continues this process by iteratively repeating the process of allocating remaining resources to the remaining groups of demand priorities, in order of priority.

Abstract: Allocating limited manufacturing resources to achieve a feasible production plan that is consistent with customer demand is a difficult and common problem faced in many manufacturing industries. For large-scale multi-stage manufacturing systems, existing methods are typically based either on allocating limited resources sequentially, according to a priority ranked list of production starts, or linear programming based models. The output of such planning models is a production plan which specifies the quantity of each part to produce at each plant, using resources available to the enterprise. Typically there are lot-sizing rule defining the permissible production start quantities. The invention disclosed herein is a method for applying these rules to the lot-sizing of production starts within a linear program. It employs advanced heuristics that consider both established operational objectives (e.g.