Material Requirements Planning Using Variable-Sized Bin-Packing Problem Formulation with Due Date and Grouping Constraints

Correct planning is crucial for efficient production and best quality of products. The planning processes are commonly supported with computer solutions; however manual interactions are commonly needed, as sometimes the problems do not fit the general-purpose planning systems. The manual planning approach is time consuming and prone to errors. Solutions to automatize structured problems are needed. In this paper, we deal with material requirements planning for a specific problem, where a group of work orders for one product must be produced from the same batch of material. The presented problem is motivated by the steel-processing industry, where raw materials defined in a purchase order must be cut in order to satisfy the needs of the planned work order while also minimizing waste (leftover) and tardiness, if applicable. The specific requirements of the problem (i.e., restrictions of which work orders can be produced from a particular group of raw materials) does not fit the regular planning system used by the production company, therefore a case-specific solution was developed that can be generalized also to other similar cases. To solve this problem, we propose using the generalized bin-packing problem formulation which is described as an integer programming problem. An extension of the bin-packing problem formulation was developed based on: (i) variable bin sizes, (ii) consideration of time constraints and (iii) grouping of items/bins. The method presented in the article can be applied for small- to medium-sized problems as first verified by several examples of increasing complexity and later by an industrial case study.