An analytical approach for analysing the impact of risks on production planning: Case of Öztiryakiler

Abstract

Accurate and applicable production plans are a must for manufacturing companies. Although companies tend to prepare ideal production plans, some exogenous factors can affect their validity. These risks, which occur unexpectedly, will have a negative influence on the plan. This study aims to determine the exogenous factors affecting the success of production planning of square and rectangular food containers manufactured by Öztiryakiler, and analyse their impacts on the plans. The risk factors are evaluated using Failure Mode and Effects Analysis, and their risk priority numbers are calculated. A mixed-integer linear programming model with the objective of total cost minimisation is developed to obtain the production plan of containers. Initially, an ideal data set is used as input; hence, this model’s output displays a risk-free plan. Similarly, for each of the risk factor scenarios, mathematical models are solved with risk-related data. GAMS software and CPLEX solver is utilised in the solution of all models. Finally, for each of the selected high risk alternative, the expected total costs are calculated. This is achieved by multiplying the normalized risk priority number obtained from the Failure Mode and Effects Analysis with the corresponding optimal total cost of the risky plan. This analysis highlights the most critical risks, and comparison with the risk-free plan helps in proposing system improvements. © 2020, Springer Nature Switzerland AG.