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This paper presents a hierarchical approach to plan and schedule production in a manufacturing environment that can be modeled as a single stage process. Initially, the basic tradeoffs inherent to production planning decisions are represented by means of an aggregate model, which is solved on a rolling horizon basis. Subsequently, the first solution of the aggregate plan is disaggregated, considering additional cost objectives and detailed demand constraints. Several improvements in the methodology related to hierarchical production planning are suggested. Special attention is given to alternative disaggregation procedures, problems of infeasibilities, and the treatment of high setup costs. Computational results, based on real life data, are presented and discussed.
Bitran et al. (Sat,) studied this question.