Optimization of Batch Sizes : A simulation based study on how equally sized batches affect production planning

Abstract: Volvo Trucks is one of the world’s largest truck manufacturers, with a cab production plant located in Umeå, Sweden. The variation in batch sizes of the different components causes variation in the length of the production plan of subparts, and thus variation in production lead times. This project aims to examine how equally sized batches affect the length of the production plan, and what batch size is optimal to achieve efficient production planning. The examination was conducted with respect to lean principles and a mathematical model was built to simulate the use of different batch sizes. In order to run the simulation, both historical and new data was used. Parameters interesting to examine for the result are the length and variation of the production plan, number of set-ups, production frequency, inventory levels and the annual production. A batch size of 2.0 hours is optimal as the length of the production plan then varies the least in the allowed interval. Equally sized batches exclusively were not found to contribute to a more efficient production planning. Smaller batch sizes in combination with equally sized batches were however shown to decrease the variation in the production plan, and to result in increased stock turnover and decreased inventory levels.