Professional Documents
Culture Documents
Production Planning
in Production Networks
Models for Medium and Short-term Planning
123
Pierluigi Argoneto, Dr. Ing. Giovanni Perrone, Prof. Ing.
Dipartimento di Tecnologia Meccanica Dipartimento di Tecnologia Meccanica
Produzione ed Ingegneria Gestionale Produzione ed Ingegneria Gestionale
(DTMPIG) (DTMPIG)
Università degli Studi di Palermo Università degli Studi di Palermo
Viale delle Scienze Viale delle Scienze
90128 Palermo 90128 Palermo
Italy Italy
Paolo Renna, Dr. Ing. Giovanna Lo Nigro, Prof. Ing.
Dipartimento di Ingegneria e Fisica Dipartimento di Tecnologia Meccanica
dell’Ambiente (DIFA) Produzione ed Ingegneria Gestionale
Università degli Studi della Basilicata (DTMPIG)
Macchia Romana Università degli Studi di Palermo
85100 Potenza Viale delle Scienze
Italy 90128 Palermo
Italy
Manfredi Bruccoleri, Dr. Ing. Sergio Noto La Diega, Prof. Ing.
Dipartimento di Tecnologia Meccanica Dipartimento di Tecnologia Meccanica
Produzione ed Ingegneria Gestionale Produzione ed Ingegneria Gestionale
(DTMPIG) (DTMPIG)
Università degli Studi di Palermo Università degli Studi di Palermo
Viale delle Scienze Viale delle Scienze
90128 Palermo 90128 Palermo
Italy Italy
Giovanni Perrone
Contents
3 Negotiation: an Overview...............................................................................25
3.1 Introduction ..............................................................................................25
3.2 Negotiation and Rational Self-interested Agents .....................................28
3.3 Negotiation Models ..................................................................................29
viii Contents
9 Conclusions....................................................................................................225
9.1 Summary ................................................................................................225
9.2 Major Scientific Contributions of This Book .........................................226
9.3 Directions for Future Work ....................................................................227
x Contents
Index ....................................................................................................................255
1
1.1 Introduction
In recent years, manufacturing companies have entered a new era in which all
manufacturing enterprises must compete in a global economy. Global competition
increases customers’ purchasing power, which, in turn, drives frequent
introduction of new products and causes large fluctuations in product demand. To
stay competitive, companies must use production systems that not only produce
their goods with high productivity, but also allow for rapid response to market
changes and customers’ needs. A new manufacturing capability that allows for a
quick production launch of new products, with production quantities that might
unexpectedly vary, becomes a necessity. Reconfigurable manufacturing systems
(RMS), offer this capability. If we look at the evolution steps of factories in the last
twenty years, we basically find different factory concepts and production concepts
in each decade depending on different goals and criteria. Stable and well-predicted
markets led to a functional factory in which know-how was concentrated in
departments in order to achieve optimisation with a high flexibility of resources.
Later, the necessity of a more consistent orientation to markets and products led to
segmented factories. These concepts led to an enormous increase of the efficiency
of the total business through independently acting units oriented towards products
and markets. The growing complexity within the value-added chain can no longer
be steered merely by means of hierarchical leadership in competences. In the
future, networks as well as increasing cooperation and decentralisation will be
regarded as a main solution. These concepts are called decentralised production
networks and are regarded as a possible answer to the new challenges of the global
competition in order to achieve shorter response time and stronger orientation
towards customer needs, through a high innovation ability. Prerequisites for the
successful participation in production networks are changeable and reconfigurable
production processes, resources, structures and layouts as well as their logistical
and organisational concepts. This ability is necessary to withstand the permanent
change and the turbulence of the surroundings of production companies and can be
described as changeability.
2 Production Planning in Production Networks
months) may cause lost business opportunities. The decisions are when and how
much capacity to install under demand uncertainty, which is modelled as a
continuous time Brownian motion. The objective is to identify the configuration
that maximises the total expected profits, which is found by applying a stochastic
control approach. This study shows that, in general, it is more costly to install a fab
before demand is realised than to install it late. In that regard, large-capacity
expandable fabs provide a good compromise by delaying the capacity increments
and also achieving economies of scale better than low-capacity fabs.
Paper [28] considers capacity planning across multiple fabs. Microelectronics
technologies are aggregated and distinguished by their capacity consumption rate.
Individual fab capacity is modelled as a single resource whose level is a random
variable and measured in wafer output per period. This approach takes into account
yield variability at an aggregate level. Uncertainty in demand for technologies and
uncertainty in capacity levels are reconciled in the form of discrete scenarios in a
multi-period, multi-stage, stochastic programming model. The objective is to
minimise the expected mismatch between planned and actual capacity allocation as
defined in the scenarios. The authors illustrate various methodologies for preparing
demand scenarios as input to their optimisation model. In [29], based on previous
work, the authors expand their model to include capacity expansion decisions and
aiming at minimising the sum of capacity expansion and expected fab
reconfiguration costs. An efficient solution approach, inspired by the decentralised
decision-making environment is developed. The proposed approach captures the
trade-off between the extent of the information shared between participating
decision makers and the quality of capacity planning decisions. It also quantifies
the value of information sharing.
Another line of research tries to determine whether there is enough tool
capacity to satisfy the anticipated demand through a medium-term planning
horizon and if so, when and in what numbers are additional tools required. These
are very important decisions because tools cost up to several million dollars each
and have long delivery lead times (6 to 12 months).
Further group research in these tactical planning problems comes under three
categories differentiated by the level of detail the models capture and their
respective solution approaches: mathematical programming, queuing networks and
simulation and other heuristics. Mathematical programming approaches distinguish
processes only by production rate which are otherwise treated as generic. Yield and
cycle time variability is modelled as a constant yield factor and as such congestion
effects are not modelled. The planning period is up to two years which reflects the
delivery lead time for newly acquired tools. Some studies also incorporate the
assignment of operations to tool groups that are capable of doing multiple
operations at different rates into their optimisation models. These are also referred
to as routing decisions. The batch-processing nature of semiconductor
manufacturing lends itself well to modelling with queuing networks. This approach
can compute the cycle time and throughput without running computationally
expensive simulation models. Although this approach has been applied extensively
in performance evaluation of manufacturing systems (and semiconductor
manufacturing as well), we restrict our scope to studies that use this approach
within a scheme to make tool capacity planning decisions. In such studies, a
Introduction 7
queuing network model guides the search for a minimum cost tool configuration
that achieves a desired performance level for a wafer fab. One restrictive
assumption of this approach in the literature observed so far is that the
manufacturing flow, the assignment of operations to tools and the routing of
batches is assumed to be predetermined. Detailed simulation models are also
required to test the solutions obtained by optimisation methods or by heuristics.
However, the substantial computational requirements of these models often
prohibit their use for evaluating more than a handful of alternative configurations.
These and some ad hoc approaches for capacity planning at tactical levels (such as
spreadsheet applications) fall into the last category that we consider.
There are a few researchers who study the problem with a deterministic model. In
[30], a linear programming (LP) based decision support system for tactical
planning at an IBM wafer fab which is referred to as the CAPS system has been
developed. The decision problem is to find the most profitable product mix for a
given tool set and an expected demand profile. An important simplifying
assumption is that there is no inventory or back-order between two consecutive
planning periods. In [31], a deterministic integer model that relaxes this
assumption has been developed. The model minimises the total cost of inventory,
tool acquisition and tool operating costs such that the expected demand is satisfied.
The authors develop a Lagrangian relaxation-based heuristic which is empirically
shown to produce solutions with a small duality gap. However, demand volatility
and long manufacturing lead times in the semiconductor industry make it important
to integrate demand uncertainty into any decision model. Hence, most studies use a
stochastic programming approach where the demand distribution is included as a
set of discrete scenarios in the model. Swaminathan [32] studies a tool
procurement problem in a single period under the simplifying assumption that
operation-to-tool assignments are already known (rather than optimised by the
model). Although the underlying model is simplified, the study illustrates the
benefits of incorporating demand scenarios versus optimising with respect to
expected demand only. Later, the same author, in [33], generalises his earlier work
by extending it to a multi-period setting and including operation-tool assignments
as decision variables. Heuristic solution methods are developed and their
performance is investigated. The study reinforces the benefits of the demand
scenario approach and applies the solution methods to an industry data set.
Zhang et al. [34] focus on the large number of demand scenarios that are
required to capture uncertainty accurately, since this aspect is one of the main
reasons for the large size of the resulting model. Their model is developed under
the simplifying assumptions that there is no inventory and there are no backorders
between periods and that the allocation of products to tools follows simple rules
rather than explicitly being optimised by the model. The multi-variate nature of the
demand distribution (for all products combined) complicates the model
considerably.
8 Production Planning in Production Networks
Chen et al. [35] are among the first to use a queuing network model to study the
performance of a wafer fab as an alternative to a detailed simulation study. The
advantage of a queuing model is that it provides a closed-form solution that relates
control policies and fab configuration to system performance (e.g., manufacturing
cycle time, throughput, work in progress). Such an analytical model makes it easy
to explore the performance consequences of different facility configurations and
operating policies without heavy computational requirements. In [36], the authors
make use of the closed-form solution of a queuing model to develop a set of non-
linear equations that represent the cycle time as a function of the total number of
tools in the system. A non-linear mixed integer optimisation model is developed,
which aims to minimise cycle time with respect to a given demand profile and a
given budget available for tool purchases. The authors develop several heuristic
solution approaches and validate them with a set of industry data.
Hopp et al. [37] combine a queuing network model with simulation. The study
attempts to find a minimum cost capacity configuration while the cycle times are
within acceptable limits and throughput is as desired. The queuing model is used to
guide the search of the optimisation model to achieve this feat Batch processes,
machine changeovers and re-entrant flows are incorporated. In [38], the authors
also use a queuing network model to derive cycle time and production costs as
functions of the number of tools in tool groups and of the throughput for products.
The model is used to determine the number and size of tool groups with the criteria
being the trade-off between manufacturing costs and the product throughput. They
use the model to analyse the impact of fab scale on cycle time and production
costs. They show that the degree of versatility of the tool groups determines the
required fab capacity to achieve a given performance: as the versatility increases
the required fab scale decreases. Agile mini-fabs could therefore be achieved by
installing versatile tools.
There are a large number of studies that develop rough-cut heuristic approaches for
finding easy-to-understand practical capacity planning solutions. However,
development complexity and high runtime requirements preclude simulation from
being a mainstream application tool. In [39], the authors apply simulation for
capacity planning in a development wafer fab and look at the work in process
(WIP), cycle time, bottleneck operations and the impact of randomness on the
performance. The model is based on company-wide tool availability, process
requirement and demand data which are used in simple equations to turn first-cut
aggregate results into capacity requirements. In [40], the authors develop a
materials requirement planning model tailored to a twin wafer fab system. The
model keeps track of WIP amounts and current capacity loads and also decides on
wafer releases assuming unlimited capacity. Its main goal is to smooth loading
across fabs and across planning periods. Kotcher and Chance [9] describe an easy-
to-apply methodology for assessing the sensitivity of tool capacity with respect to
product mix. The methodology could be used in connection with a simulation
Introduction 9
model to identify bottleneck tool groups and make tool acquisition decisions. In
[21], the authors evaluate tool and factory floor (shell space) capacity planning and
expansion methodologies that are commonly practiced in industry and highlight
their relative performance under different conditions. They make use of an
optimum-seeking algorithm developed previously by the authors that finds the
optimal tool purchase time and quantities such that the sum of expected lost
demand and tool purchase costs are minimised. The results of this algorithm serves
as a common comparison basis for the heuristic methods that are practised.
1.5 Motivation
As has been shown in the previous sections, different approaches have been
utilised to face the strategic/tactical/operational-level manufacturing decisions of
the high-tech industries. Many of these studies aim to analyse and optimise, where
possible, some performance indicators related to a specific decision level. No
organic study on the capacity planning through all the levels constituting a high-
tech, high-volume company has been detected in the literature. This lack is the
starting point of the research presented in this book: an innovative distributed and
hierarchical approach for planning capacity at different levels of time horizon will
be introduced. A general framework for distributed production planning of
complex and multi-plant manufacturing companies in high-tech, high-volume
industry will be analyzed using different mathematical tools. For each level
bargaining objectives, actors, information and roles will be defined and simulated
using a specific simulation environment based on the multiple-agent-system
(MAS) paradigm. The focus pertains to the study of coordination policies in a
distributed environment. Specifically, the goal is to evaluate their impact in a
company, which we call reconfigurable enterprise (RE), which is a production
network made of different and geographically dispersed plants which can be
reconfigured in order to gather a specific production objective of the enterprise.
The distributed and self-organising nature of REs allows responsiveness with
regard to the unpredictable market changes: quite normally significant variations in
the demand rate arise suddenly and in an unpredictable way. In this situation, the
low degree of flexibility characterising production capacity leads almost inevitably
to some criticalities; however, the RE’effectiveness and efficiency depends on the
extent to which overall performance is obtained; in order to reach this objective
REs require strong coordination tools. As shown in the literature overview of the
previous sections, basically two approaches support coordination in a distributed
organisation: centralised planning tools and decentralised ones. In a centralised
planning perspective decisions are taken by a central planner: the most important
drawback concerns the lack of flexibility of such a solution that leads this approach
to be unusable in the real practice where the scale of the planning problem
increases. The other possible solution is to use decentralised decision-making
approaches. This means that each actor involved in the planning process takes its
own planning decision, while common goals are reached through coordination
mechanisms. This book will introduce a new approach concerning capacity
allocation methodologies, where managerial and organisational tools are proposed
10 Production Planning in Production Networks
with the aim of supporting human decision making, rather than substituting it. In
particular, the authors combine techniques from cooperative game theory,
negotiations models and multi-agent systems to produce highly reactive,
lightweight, useful tools to be used in a real-time system environment in
distributed enterprises.
1.7 References
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Lehigh University, Bethlehem, PA
Introduction 11
[2] Bradley JR, Arntzen BC (1997) The simultaneous planning of production, capacity
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[3] Atamturk A, Hochbaum DS (2001) Capacity acquisition, subcontracting, and lot
sizing. Manag Sci 47(8):1081–1100
[4] Kouvelis P, Milner JM (2002) Supply chain capacity and outsourcing decisions: the
dynamic interplay of demand and supply uncertainty. IIE Trans 34(8): 717–728
[5] Tan B (2002) Subcontracting with availability guarantees: production control and
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[6] van Mieghem JA, Rudi N (2002) Newsvendor networks: inventory management and
capacity investment with discretionary activities. M&SOM 4(4):313–335
[7] Bernstein F, DeCroix GA (2004) Decentralized pricing and capacity decisions in a
multitier system with modular assembly. Manag Sci 50(9):1293–1308
[8] Ferguson ME, DeCroix GA, Zipkin PH (2002) When to commit in a multi-echelon
supply chain with partial information updating. Working paper, Georgia Tech,
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In: IEEE international symposium on semiconductor manufacturing conference
proceedings, 11–13 October 1999, Santa Clara, CA, pp 73–76
[10] Pindyck RS (1988) Irreversible investment, capacity choice, and the value of the firm.
Am Econ Rev 78(5):969–985
[11] van Mieghem JA (1998) Investment strategies for flexible resources. Manag Sci
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[12] Bish E, Wang Q (2004) Optimal investment strategies for flexible resources,
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[13] Feinstein SP (2002) A better understanding of why npv undervalues managerial
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[14] Dixit A, Pindyck RS (1994) Investment under uncertainty. Princeton University Press,
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[15] Black F, Scholes M (1999) The pricing of options and corporate liabilities. J Polit
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[17] Miller LT, Park CS (2002) Decision making under uncertainty—real options to the
rescue?. Eng Econ 47(2): 105–150
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[20] McDonald R, Siegel D (1985) Investment and the valuation of firms when there is an
option to shut down. Int Econ Rev 26:331–349
[21] Cakanyildirim M, Roundy RO (2002) Optimal capacity, expansion and contraction
under demand uncertain. Working paper, University of Texas, Dallas, TX
[22] Johnson B, Billington C (2003) Creating and leveraging options in the high
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making. Organ Sci 12(6):772–777
12 Production Planning in Production Networks
[26] Bollen NP (1999) Real options and product life cycles. Manag Sci 45(5):670
[27] Benavides DL, Duley JR, Johnson BE (1999) As good as it gets: optimal fab design
and deployment. IEEE Trans Semicond Manuf 12(3):281–287
[28] Christie RME, Wu SD (2002) Semiconductor capacity planning: stochastic modelling
and computational studies. IIE Trans 34(2):131–144
[29] Karabuk S, Wu SD (2003) Coordinating strategic capacity planning in the
semiconductor industry. Oper Res 51(6):839–849
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[32] Swaminathan JM (2000) Tool capacity planning for semiconductor fabrication
facilities under demand uncertainty. Eur J Oper Res 120(3):545–558
[33] Swaminathan JM (2002) Tool procurement planning for wafer fabrication facilities: a
scenario-based approach. IIE Trans 34(2):145–155
[34] Zhang F, Roundy R, Cakanyildirim M, Huh WT (2004) Optimal capacity expansion
for multi-product, multi-machine manufacturing systems with stochastic demand. IIE
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2
2.1 Introduction
“Game theory is a branch of mathematics that is concerned with the actions of
individuals who are conscious that their actions affect each other”. As such, game
theory (hereafter GT) deals with interactive optimisation problems. While many
economists in the past few centuries have worked on what can be considered
game-theoretical (hereafter G-T) models, John von Neumann and Oskar
Morgenstern are formally credited as the fathers of modern game theory. Their
classic book Theory of Games and Economic Behavior [1] summarises the basic
concepts existing at that time. GT has since enjoyed an explosion of developments,
including the concept of equilibrium [2], games with imperfect information [3],
cooperative games [4, 5], and auctions [6], to name just a few. Citing Shubik [7],
“In the 50s ... game theory was looked upon as a curiosum not to be taken seriously
by any behavioural scientist. By the late 1980s, game theory in the new industrial
organisation has taken over: game theory has proved its success in many
disciplines.”
GT is divided into two branches, called the non-cooperative and cooperative
branches. The two branches of GT differ in how they formalise interdependence
among the players. In the non-cooperative theory, a game is a detailed model of all
the moves available to the players. By contrast, the cooperative theory abstracts
away from this level of detail, and describes only the outcomes that result when the
players come together in different combinations. Though standard, the terms non-
cooperative and cooperative game theory are perhaps unfortunate. They might
suggest that there is no place for cooperation in the former and no place for
conflict, competition etc. in the latter. In fact, neither is the case. One part of the
non-cooperative theory (the theory of repeated games) studies the possibility of
cooperation in ongoing relationships. And the cooperative theory embodies not just
cooperation among players, but also competition in a particularly strong, unfettered
form. The non-cooperative theory might be better termed procedural game theory,
the cooperative theory combinatorial game theory. This would indicate the real
distinction between the two branches of the subject, namely that the first specifies
14 Production Planning in Production Networks
various actions that are available to the players while the second describes the
outcomes that result when the players come together in different combinations.
The goal of this chapter is to give a brief overview about GT and, specifically,
about G-T concepts and tools. Obviously, due to the need of short explanations, all
proofs will be omitted, and we will only focus on the intuition behind the reported
results.
equations wS i wxi 0 , for all i. Recall that a fixed point x of mapping f(x),
R n o R n is any x such that f ( x ) x . Define f i ( x1 , x2 ,..., xn ) wS i wxi xi . By
the definition of a fixed point,
fi ( x1* , x2* ,..., xn* ) wS i ( x1* ,..., xn* ) wxi xi* o wS i ( x1* ,..., xn* ) wxi 0 , all i.
Hence, x * solves the first-order conditions if and only if it is a fixed point of
mapping f(x) defined above. The concept of the NE is intuitively appealing.
Indeed, it is a self-fulfilling prophecy. To explain, suppose a player is able to
guess the strategies of the other players. A guess would be consistent with payoff
maximisation (and therefore reasonable) only if it presumes that strategies are
chosen to maximise every player’s payoff given the chosen strategies. In other
words, with any set of strategies that is not an NE there exists at least one player
that is choosing a non payoff maximizing strategy. Moreover, the NE has a self-
enforcing property: no player wants to unilaterally deviate from it since such
behaviour would lead to lower payoffs. Hence the NE seems to be the necessary
condition for the prediction of any rational behaviour by players.
Although attractive, numerous criticisms of the NE concept exist. Two
particularly vexing problems are the non-existence of equilibrium and the
multiplicity of equilibria. Without the existence of an equilibrium, little can be said
regarding the likely outcome of the game. If there are multiple equilibria, then it is
not clear which one will be the outcome. Indeed, it is possible the outcome is not
even an equilibrium because the players may choose strategies from different
equilibria. In some situations it is possible to rationalise away some equilibria via a
refinement of the NE concept: e.g., trembling hand perfect equilibrium [12],
sequential equilibrium [13] and proper equilibria [14]. In fact, it may even be
16 Production Planning in Production Networks
possible to use these refinements to the point that only a unique equilibrium
remains.
An interesting feature of the NE concept is that the system optimal solution (a
solution that maximises the total payoff to all players) need not be an NE. In fact,
an NE may not even be on the Pareto frontier: the set of strategies such that each
player can be made better off only if some other player is made worse off. A set of
strategies is Pareto optimal if they are on the Pareto frontier; otherwise a set of
strategies is Pareto inferior. Hence, an NE can be Pareto inferior. The Prisoner’s
Dilemma game is the classic example of this: only one pair of strategies is Pareto
optimal (both “cooperate”), and the unique Nash equilibrium (both “defect”) is
Pareto inferior.
turn it is to speak. Detail distracts attention from essentials. Some things are seen
better from a distance; the Roman camps around Metzada are indiscernible when
one is in them, but easily visible from the top of the mountain” [22].
The subject of cooperative games first appeared in the seminal work of von
Neumann and Morgenstern [1]. However, for a long time cooperative game theory
did not enjoy as much attention in economics literature as non-cooperative GT.
Cooperative GT involves a major shift in paradigms as compared to non-
cooperative GT: the former focuses on the outcome of the game in terms of the
value created through cooperation of (a subset of) players but does not specify the
actions that each player will take, while the latter is more concerned with the
specific actions of the players. Hence, cooperative GT allows us to model
outcomes of complex business processes that otherwise might be too difficult to
describe (e.g., negotiations) and answers more general questions (e.g., how well is
the firm positioned against competition). In what follows, we will cover
transferable utility cooperative games (including two solution concepts: the core of
the game and the Shapley value).
S j z , j 1,..., m
the players in any coalition m is connected to other players not in the coalition;
finally, the mutually exclusive union of all coalitions m forms the grand coalition.
Definition 5. The utility vector S 1 ,..., S N is in the core (and will be called
imputation) of the cooperative game if it satisfies S ( N ) Q ( N ), group rationality,
and xi t Q (^i`), individual rationality.
The core of the game, introduced by Gillies in 1953 [24], can be interpreted
through the added-value principle. Define (N\S) as a set of players excluding those
in coalition S (coalition can include just one player). Then the contribution of a
coalition S can be calculated as Q ( N ) Q ( N \ S ). Clearly, no coalition should be
able to capture more than its contribution to the coalition (otherwise the remaining
N\S players would be better off without the coalition S). Definition 5 clearly
satisfies the added-value principle. Typically, when analysing a game, one has to
calculate an added value from each player: if the value is zero, the player is not in
the core of the game. If the core is non-empty, the added values of all players in the
core comprise the total value that the players create. As is true for NE, the core of
the game may not exist (i.e., it may be empty) and the core is often not unique.
When the core is non-empty, the cooperative demands of every coalition can be
granted, but when the core is empty, at least one coalition will be dissatisfied.
Shubik [7] noted that a game with a non-empty core is sociologically neutral, i.e.
every cooperative demand by every coalition can be granted, and there is no need
to resolve conflicts. On the other hand, in a coreless game, the coalitions are too
strong for any mechanism to satisfy every coalitional demand. However, a core set
with too many elements is not desirable, and it has little predictive power [25].
Imputations in the core, where they exist, have a certain stability, because no
player or subset of players has any incentive to leave the grand coalition. But since
many games have empty core, the core fails to provide a general solution for n-
person games in characteristic form. von Neumann and Morgenstern [24] proposed
a different solution concept more generally applicable than the core. That proposal
is called the von Neumann Morgenstern solution or the stable set. The stable set is
based on the concept of dominance, which is explained as follows. One imputation
is said to dominate another if there is a subset of players who prefer the first to the
second and can enforce it by forming a coalition.
only players generating added value should share the benefits. Finally, the third
axiom requires additivity of payoffs: for any two characteristic functions Q 1 and Q 2
it must be that S (Q 1 Q 2 , N ) S (Q 1 , N ) S (Q 2 , N ).
The surprising result obtained by Shapley is that there is a unique equilibrium
payoff (called the Shapley value) that satisfies all three axioms.
Theorem 3. There is only one payoff function S that satisfies the three axioms.
It is defined by the following expressions for i N and all Q :
|S|!(|N ||S|1)!
S i (Q ) ¦
S N \i |N |!
Q S ^i` Q S .
to the resulting payoff allocation that each of the participants unanimously agrees
upon. The axiomatic approach requires that the resulting solution should possess a
list of properties. The axioms do not reflect the rationale of the agents or the
process in which an agreement is reached but only attempts to put restrictions on
the resulting solution. Further, the axioms do not influence the properties of the
feasible set. Before listing the axioms, we will now describe the construction of the
feasible set of outcomes. Formally, Nash defined a two-person bargaining problem
(which can be extended easily to more than two players) as consisting of a pair
F , d where F is a closed convex subset of R 2 , and d d1 , d2 is a vector in
R 2 . F is convex, closed, non-empty, and bounded. Here, F, the feasible set,
represents the set of all feasible utility allocations and d represents the
disagreement payoff allocation or the disagreement point. The disagreement point
may capture the utility of the opportunity profit. Nash looked for a bargaining
solution, i.e., an outcome in the feasible set that satisfied a set of axioms. The
axioms ensure that the solution is symmetric (identical players receive identical
utility allocations), feasible (the sum of the allocations does not exceed the total
pie), Pareto optimal (it is impossible for both players to improve their utilities over
the bargaining solutions), the solution be preserved under linear transformations
and be independent of “irrelevant” alternatives. Due to constraints on space, the
reader can refer to Roth [28] for a very good description of the solution approach
and a more detailed explanation of the axioms. The remarkable result due to Nash
is that there is a bargaining solution that satisfies the above axioms and it is unique.
Theorem 4 [27]. There is a unique solution that satisfies all the “axioms”. This
solution, for every two-person bargaining game F , d is obtained by
solving: arg max ( x1 d1 )( x2 d2 ) .
x ( x1 , x2 )F , x t d
The axiomatic approach, though simple, can be used as a building block for
much more complex bargaining problems. Even though the axiomatic approach is
prescriptive, descriptive non-cooperative models of negotiation such as the Nash
demand game [29] and the alternating offer game [30], reach similar conclusions
as Nash bargaining. This somehow justifies the Nash bargaining approach to model
negotiations. In our discussion, we have only provided a description of the
bargaining problem and its solution between two players. However, this result can
easily be generalised to any number of players simultaneously negotiating for
allocations in a feasible set.
2.13 References
[1] von Neumann J, Morgenstern O (1944) Theory of games and economic behaviour.
Princeton University Press
[2] Nash JF (1950) Equilibrium points in n-person games. Proc Nat Acad Sci USA 36,
48–49
[3] Kuhn HW (1953) Extensive games and the problem of information. In Contributions
to the theory of games, vol II, Kuhn HW, Tucker AW, editors. Princeton University
Press. 193–216
24 Production Planning in Production Networks
Negotiation: an Overview
3.1 Introduction
The variety of involved disciplines and perspectives in the conflict resolution field
has created different terminologies, definitions, notations and formulations about
the concept of negotiation. As a result, interdisciplinary cooperation among the
relevant fields of study would suffer from inconsistencies and contradictions [1].
Yet, negotiation requires an interdisciplinary approach because of their
psychological, social and cultural character; economic, legal and political
considerations involved; quantitative and qualitative aspects; strategic, tactical and
managerial perspectives. Clearly, interdisciplinary approaches provide richer and
more comprehensive models of negotiators and negotiations. A schematic
representation of the different perspectives and influences on negotiation research
is presented in Figure 3.1: law and social sciences are the main contributors to the
prescriptive and descriptive models, heuristics and qualitative studies of
negotiation processes and negotiators’ behaviour [2, 3]; economics and
management science concentrated on the construction of formal models and
procedures of negotiations, rational strategies and the prediction of outcomes [4,
5]. Computer science and information systems contributions include construction
of electronic negotiation tables, decision and negotiation support systems (DSS,
NSS), artificial negotiating software agents (NSA) and software platforms for
bidding and auctioning [6–9]. The four arrows depicted in Figure 3.1 connect areas
of studies with the corresponding common results. The bi-directional arrow
indicates that the negotiation tools, agents and platforms are often based on the
results of the studies in economic and social sciences [10–13], and also that,
increasingly, computational models and systems influence the construction of
negotiation techniques, models and procedures [14, 15]. The latter phenomenon
marks a fairly recent development in negotiation research: increased computing
and networking power and findings from computer science and information
systems feed back into negotiation models and procedures giving them more
flexibility.
26 Production Planning in Production Networks
Negotiation
Negotiation media
procedures and
and systems: tools,
models: strategies,
agents and platforms
tactics and techniques
Figure 3.1. Negotiation research areas, their results and reciprocal key influences1
1
M. Bichler, G. Kersten, S. Strecker: Towards a Structured Design of Electronic
Negotiations. Group Decision and Negotiation, 2003, Vol. 12, No. 4, 311–335.
Negotiation: an Overview 27
that does not include any kind of central symbolic world model and does not use
any complex symbolic reasoning. These types of agents work efficiently when they
are faced with many “routine” activities. Many researchers suggest that neither a
completely deliberate nor a completely reactive approach is suitable for building
agents. They use hybrid systems, which attempt to combine the deliberate an the
reactive approaches.
Negotiations require that the participants make many decisions. The offers,
counter-offers and concessions they make in an effort to search for an agreement
result from the individual decisions they make. The issues of formulating and
solving decision problems, including the specification of feasible alternatives,
formulation of decision criteria and preferences, are the subject of decision theory.
There is a vast literature on decision theory, rationality and decision making. One
of the central tenets of decision theory is rationality and its use in the assessment of
decision alternatives and choice. It is well known that people often do not conform
to the rationality principles even if they are aware of breaking the axioms [46, 47].
Decision theorists assert that even if full rationality is not attainable, instrumental
rationality is, which requires a rigorous approach to gathering and using
information about the problem and about the decisionmaker [48]. This is perhaps
one of the most important contributions of decision theory which also is directly
applicable to negotiations. The three central topics of decision theory are: decision
alternatives, multiple conflicting objectives, and uncertainty of the decision
outcomes. Uncertainty of decision outcomes is an important issue which needs to
be considered in every decision problem, including negotiations. With the
exception of the participants having a different opinion about uncertainty, it is an
issue that is inherent to the problem and not subject to negotiation. The
specification of decision alternatives, either implicitly (i.e., with the use of
constraints) or explicitly, is performed during the structuring of the decision
problem. The development of the problem’s analytic structure involves the
consideration of decision attributes and objectives. The attributes, objectives and
alternatives are key aspects of negotiations; decision theory provides a number of
well-defined approaches for structuring [49] as well as specific techniques,
including decision trees, influence diagrams, and decision tables.
Many decisions are difficult because the decision maker has multiple and
conflicting objectives. Decision theory suggests the of use a preference elicitation
scheme and a function defined on the objectives and preferences [48]. This
function, under rationality conditions, determines the subjective value of a decision
alternative in the case of certainty or the utility, in the case of uncertainty. This
function is a measurement function defined on the set of alternatives and it allows
us to compare them. In particular it allows us to compare offers and counter-offers,
determine differences among them and select concessions that may increase the
utility for the counterpart while limiting the decrease of one’s own utility. The use
of utility functions allows for the achievement of efficient compromises providing
that the participants or a third party knows these functions and the set of feasible
alternatives. Given the set of feasible alternatives, it is the utility function that
assigns a unique value to each alternative, making the choice of the optimal
alternative automatic. Because of the importance of utility, decision analysts
propose that this function be constructed carefully and with the help of experts.
They apply a preference elicitation and utility construction approach so that the
assumptions underlying the multi-attribute utility theory (MAUT) are met. The
strict requirements of MAUT and difficulties in utility construction led to the use
of proxy functions neglecting rationality principles.
34 Production Planning in Production Networks
Game theory is the most rigorous approach towards conflict resolution and allows
for formal problem analysis and the specification of well-defined solutions. Game-
theoretical bargaining models assume rationality of agents and that each agent’s
choice can be uniquely described by utility function. Linhart [50] summarises
several restrictions regarding game-theoretical models of bargaining. For example,
human agents are often constrained by their bounded rationality, which is one
reason why game-theoretical models of bargaining do not fit in explaining real
human negotiating behaviour. Yet, game-theoretical models of bargaining are seen
as potential candidates for automated negotiations among software agents.
The limitations of game theory are well known and rooted in its normative
orientation caused mainly by the strict rationality assumptions that are not met in
reality. Therefore, game-theoretica models do not allow for prescriptive advice that
is sought by negotiators and their advisers. From the analyst’s perspective it may
be reasonable to assume that the negotiator whom the analyst advises is rational
however; it is not reasonable to assume the same about the opponent. This
observation, together with a weakened rationality assumption, provided the basis
for negotiation analysis [51]. With the objective of providing advice to one party,
negotiation analysis takes prescriptive/descriptive orientation in that it assumes
rationality of one party but not necessarily of the other [52]. Negotiation analysis
integrates decision analysis and game theory in order to provide formal and
meaningful support. The goal of negotiation analysis is to bridge the gap between
descriptive qualitative models and normative game-theoretical models of
bargaining. It adopts a number of behavioural concepts and incorporates them in
quantitative models. This way significantly extends the expressiveness of the
models and their capability of describing various negotiation situations. It also
allowed analysts and advisors to conduct formal analysis of negotiations and to
provide support. Negotiation analysis tends to adopt the application of game-
theoretical solution concepts or efforts to find unique equilibrium outcomes.
Instead, negotiation analysts generally focus on changes in perceptions in the zone
of possible agreement and the distribution of possible negotiated outcomes,
conditional on various actions [51, 53]. The contributions of negotiation analysis
include: a subjective perspective on the process and outcomes, concentration on the
possible agreements rather than search for one equilibrium point, and acceptance
of goal-seeking rather than game-theoretical rationality. This makes an asymmetric
perspective possible [44, 52]. Other approaches have a symmetrical orientation:
behavioural studies focus on descriptions of the parties and their interactions, game
theory and optimisation assume that the parties are rational hence they have
symmetrically prescriptive orientation. In contrast, negotiation analysis is used to
generate prescriptive advice to the supported party given a descriptive assessment
of the opposing parties. In other words, negotiation analysis reconciled several
important concepts of behavioural research and game theory.
Negotiation: an Overview 35
3.10 References
[1] Gulliver PH (1979) Disputes and negotiations: a cross-cultural perspective. Orlando,
FL, Academic
[2] Bell DE, Raiffa H (1991) Decision making: descriptive, normative, and prescriptive
interactions. Cambridge, Cambridge University
[3] Pruitt DG (1981) Negotiation behaviour. New York, Academic
[4] Nash JF (1950) The bargaining problem. Econometrica 18: 155–162
[5] Roth AE (1979) Axiomatic models of bargaining. Berlin, Springer-Verlag
[6] Holsapple CW, Lai H (1998) A formal basis for negotiation support system research.
Group Decis Negot 7(3): 199–202
[7] Kersten GE (1997) Support for group decisions and negotiations: an overview. In
multicriteria analysis, Climaco J (ed), Springer Verlag, pp 332–346
[8] Maes P, Guttman R (1999) Agents that buy and sell: transforming commerce as we
know it. Commun ACM 42(3): 81
[9] Rosenschein JS, Zlotkin G (1994) Rules of encounter: designing conventions for
automated negotiation among computers. Cambridge, MA, MIT Press
Negotiation: an Overview 37
[10] Bui T, Yen J (2001) A multi-attribute negotiation support system with market
signaling for electronic markets. Group Decis Negot 10(6): 515–537
[11] Hamalainen RP (1995) Special issue on dynamic game modeling in bargaining and
environmental negotiations. Group Decis Negot 4(1)
[12] Raiffa H (1996) Lectures on negotiation analysis. Cambridge, MA, PON
[13] Teich JE, Wallenius H. (1994) Advances in negotiation science. Trans Oper Res 6:
55–94
[14] Kumar M, Feldman S (1998) Internet auctions. Proc 3rd USENIX Workshop on
Electronic Commerce. Boston, MA: 49–60
[15] Pennock DM, Horvitz E (2000). Collaborative filtering by personality diagnosis: a
hybrid memory and model-based approach. Proc 16th conference on uncertainty in
artificial intelligence, San Francisco, USA
[16] Thompson L (2001) The mind and heart of the negotiator. Upper Saddle River, NJ,
Prentice Hall
[17] Raisch W (2000) The emarketplace: strategies for success in B2B ecommerce,
McGraw-Hill
[18] Shim J Hsiao N (1999) A literature review on web-based negotiation support system.
Documentation for web-based negotiation training
[19] Vakali A, Angelis L (2001) Internet based auctions: a survey on models and
applications. SIGe-com, Exch Newsl ACM Spec Interest Group E-Commerce 2(2): 6–
15
[20] Jennings NR, Faratin P (2001). Automated negotiations: prospects, methods and
challenges. Group Decis Negot 10(2): 199–215
[21] Edwards J (2001) Working the wiggle room. Line 56(April): 50–55
[22] Parkes D (1999) iBundle: an efficient ascending price bundle auction. Proc 1st ACM
conference on electronic commerce (EC–99): 148–157
[23] Rassenti S, Smith VL (1982) A combinatorial auction mechanism for airport time slot
allocations. Bell J Econ 13: 402–417
[24] Rothkopf MH, Pekec A (1998). Computationally manageable combinatorial auctions.
Manag Sci 44(8): 1131–1147
[25] Guttman R (1998) Agent-mediated integrative negotiation for retail electronic
commerce. Proc workshop on agent-mediated electronic trading (AMET'98)
[26] Wurman P, Wellman M (1998). The michigan internet auctionbot: a configurable
auction server for human and software agents. Proc 2nd int conf on autonomous agents
(Agents–98)
[27] Stroebel M (2002). A design and implementation framework for multi-attribute
negotiation: intermediation in electronic markets. University of St. Gallen,
Switzerland.
[28] Kraus S, Lehmann D (1995) Designing and building a negotiating automated agent.
Comput Intell 11(1):132–171
[29] Teich JE, Wallenius H (2001) Designing electronic auctions: an internet-based hybrid
procedure combining aspects of negotiations and auctions. Electron Commerce Res
1(1): 301–314
[30] Subrahmanian VS, Bonatti P Dix J, Eiter T, Kraus S, Ozean F, Ross R (2000).
Heterogenous agent systems: theory and implementation. MIT Press, Cambridge,
Massachusetts
[31] Wooldrige MJ, Jennings NR (1995). Intelligent agents. Springer-Verlag, Berlin
[32] Etzioni O, Weld DS (1995) Intelligent agents on the internet: fact, fiction and forecast.
IEEEE Expert 10(4):44–49
[33] Conry SE, Kuwabara K, Lesser VR, Meyer RA (1991) Multistage negotiation for
distributed satisfaction. IEEE Trans Syst Man Cybern, Special issue on distributed
artificial intelligence, 21(6):1462–1477
38 Production Planning in Production Networks
[57] Osborne MJ, Rubinstein A (1994) A course in game theory. MIT Press, Cambridge,
Massachusetts
[58] Nash JF (1953) Two-person cooperative games. Econometrica, 21:128–140
[59] Luce RD, Raiffa H (1957) Games and decisions. Wiley, New York
[60] Tirole J (1988) The theory of industrial organization. MIT Press, Cambridge, MA
[61] Kreps D, Wilson R (1982) Sequential equilibria. Econometrica, 50:863–894
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4
4.1 Introduction
Most researchers in artificial intelligence (AI) to date have dealt with developing
theories, techniques, and systems to study and understand the behaviour and
reasoning properties of a single cognitive entity. AI has matured, and it endeavours
to face more complex, realistic, and large-scale problems. Such problems are
beyond the capabilities of an individual agent. The capacity of an intelligent agent
is limited by its knowledge, its computing resources, and its perspective. This
bounded rationality is one of the underlying reasons for creating problem-solving
organisations. The most powerful tools for handling complexity are modularity and
abstraction. Multi-agent systems (MASs) offer modularity. If a problem domain is
particularly complex, large, or unpredictable, then the only way it can reasonably
be addressed is to develop a number of functionally specific and (nearly) modular
components (agents) that are specialised at solving a particular problem aspect.
This decomposition allows each agent to use the most appropriate paradigm for
solving its particular problem. When interdependent problems arise, the agents in
the system must coordinate with each other one to ensure that interdependencies
are properly managed. Research in MASs is concerned with the study, behaviour,
and construction of a collection of possibly pre-existing autonomous agents that
interact with each other and their environments. Study of such systems goes
beyond the study of individual intelligence to consider, in addition, problem
solving that has social components. A MAS can be defined as a loosely coupled
network of problem solvers that interact to solve problems that are beyond the
individual capabilities or knowledge of each problem solver [1]. These problem
solvers, often called agents, are autonomous and can be heterogeneous or
homogenous. The characteristics of MASs are that:
each agent has incomplete information or capabilities for solving the
problem and, thus, has a limited viewpoint;
there is no system global control;
data are decentralised; and
computation is asynchronous.
42 Production Planning in Production Networks
The motivations for the increasing interest in MAS research include the ability
of MASs to do the following.
First, MASs are able to solve problems that are too large for a centralized
systems because of resource limitations or the sheer risk of having one centralized
system that could be a performance bottleneck or could fail at critical times.
Second, MASs can allow interconnection and interoperation of multiple
existing legacy systems. To keep pace with changing business needs, legacy
systems must periodically be updated. Completely rewriting such software tends to
be prohibitively expensive and is often simply impossible. Therefore, in the short
to medium term, the only way that such legacy systems can remain useful is to
incorporate them into a wider cooperating agent community in which they can be
exploited by other pieces of software.
Third, MASs provide solutions to problems that can naturally be regarded as a
society of autonomous interacting components agents. For example, in meeting
scheduling, a scheduling agent that manages the calendar of its user can be
regarded as autonomous and interacting with other similar agents that manage
calendars of different users [2, 3]. Such agents also can be customised to reflect the
preferences and constraints of their users. Other examples include air-traffic
control [4] and multi-agent bargaining for buying and selling goods on the internet.
Fourth, MASs could provide solutions that efficiently use information sources
that are spatially distributed. Examples of such domains include sensor networks
[5], seismic monitoring [6], and information gathering from the Internet [7].
Fifth, MASs could provide solutions in situations where expertise is distributed.
Examples of such problems include concurrent engineering [8], health care, and
manufacturing.
Sixth, MASs could enhance performance along the dimensions of
computational efficiency because concurrency of computation is exploited (as long
as communication is kept minimal, for example, by transmitting high-level
information and results rather than low-level data); reliability, that is, graceful
recovery of component failures, because agents with redundant capabilities or
appropriate interagent coordination are found dynamically (for example, taking up
responsibilities of agents that fail); extensibility because the number and the
capabilities of agents working on a problem can be altered; robustness, the
system’s ability to tolerate uncertainty, because suitable information is exchanged
among agents; maintainability because a system composed of multiple components
agents is easier to maintain because of its modularity; responsiveness because
modularity can handle anomalies locally, not propagate them to the whole system;
flexibility because agents with different abilities can adaptively organise to solve
the current problem; and reuse because functionally specific agents can be reused
in different agent teams to solve different problems.
4.2 Applications
MASs are now a research reality and are rapidly having a critical presence in many
human computer environments. A very challenging application domain for MASs
technology is the Internet. Today the Internet has developed into a highly
Multiple-agent Systems: an Overview 43
distributed open system where heterogeneous software agents come and go, there
are no well-established protocols or languages on the agent level (higher than
TCP/IP), and the structure of the network itself keeps on changing. In such an
environment, MAS technology can be used to develop agents that act on behalf of
a user and are able to negotiate with other agents in order to achieve their goals.
Auctions on the Internet and electronic commerce are such examples [9, 10]. One
can also think of applications where agents can be used for distributed data mining
and information retrieval. MASs can also be used for traffic control where agents
(software or robotic) are located in different locations, receive sensor data that are
geographically distributed, and must coordinate their actions in order to ensure
global system optimality [11]. Other applications are in social sciences where MAS
technology can be used for simulating interactivity and other social phenomena
[12], in robotics where a frequently encountered problem is how a group of robots
can localise themselves within their environment [13], and in virtual reality and
computer games where the challenge is to build agents that exhibit intelligent
behaviour [14].
As mentioned above, at each time step t the agent chooses an action at from a
finite set of actions A. When the agent takes an action, the world changes as a
result of this action. A transition model (sometimes also called world model)
specifies how the world changes when an action is executed. If the current world
state is st and the agent takes action at , we can distinguish the following two
cases:
46 Production Planning in Production Networks
where it is summed over all possible states st 1 S the world may transition to,
given that the current state is st and the agent takes action at . In words, to see
how good an action is, the agent has to multiply the utility of each possible
resulting state with the probability of actually reaching this state, and sum up the
resulting terms. Then the agent must choose the action a * that gives the highest
t
sum. If each world state has a utility value, then the agent can do the above
calculations and compute an optimal action for each possible state. This provides
the agent with a policy that maps states to actions in an optimal sense. In particular,
Multiple-agent Systems: an Overview 47
given a set of optimal (i.e., highest attainable) utilities U*(s) in a given task, the
greedy policy
S * (s ) arg max ¦ P(s '|s , a)U * (s ')
a
s'
protocol, which is not a priori the case. Second, we have to take into account the
fact that an agent may try to manipulate the protocol for its own interest, leading to
suboptimal results. The latter includes the possibility that the agent may lie, if
needed. The development of protocols that are stable (non-manipulable) and
individually rational for the agents is the subject of mechanism design or
implementation theory.
4.10 References
[1] Durfee EH, Lesser V (1989) Negotiating task decomposition and allocation using
partial global planning. In Gasser L, Huhns M (eds) Distributed artificial intelligence,
Vol 2, ,. San Francisco, CA, Morgan Kaufmann pp 229–244
[2] Dent L, Boticario J, McDermott J, Mitchell T, Zabowski D (1992) A personal learning
apprentice. Proc 10th national conference on artificial intelligence. Menlo Park, CA,
American Association for Artificial Intelligence, pp 96–103
[3] Garrido L, Sycara K (1996) Multiagent meeting scheduling: preliminary experimental
results. Proc 2nd int conf on multiagent systems, Menlo Park, CA, American
Association for Artificial Intelligence, pp 95–102.
[4] Kinny D, Ljungberg M, Rao A, Sonenberg E, Tidhard G, Werner E (1992) Planned
team activity. In Castelfranchi C, Werner E (eds) Artificial social systems, New York,
Springer-Verlag
[5] Corkill DD, Lesser VR (1983) The use of metalevel control for coordination in a
distributed problem solving network. Proc 8th int joint conf on artificial intelligence
(IJCAI–83), Menlo Park, CA, pp 767–770
[6] Mason C, Johnson R (1989) DATMS: A framework for distributed assumption-based
reasoning. In Huhns M, Gasser L (eds) Distributed artificial intelligence, Vol 2,. San
Francisco, CA, Morgan Kaufmann, pp 293–318
[7] Sycara K, Decker K, Pannu A, Williamson M, Zeng D (1996) Distributed intelligent
agents. IEEE Expert 11(6): 36–46
50 Production Planning in Production Networks
5.1 Introduction
Mass customisation consequences, such as shorter product life cycles and low-cost
variety, have brought critical pressures to improve production efficiency,
responsiveness to market changes, and substantial cost reduction. Scientific papers,
as well as government and industry expectations, seem to acknowledge that the
challenge keyword is “reconfiguration” [1]. Specifically, two major industrial
responses to mass customisation can be acknowledged: reconfigurable
manufacturing and reconfigurable enterprise (RE). From a manufacturing
perspective, the most agreed response to mass customisation is connected to the
concepts of modularity and reconfigurability of production systems. Thanks to
their modularity reconfigurable manufacturing systems (RMS) allow us to achieve
low customisation cost [2]. On the other hand, from an organizational point of
view, reconfigurable production networks or enterprises are nowadays considered
the industrial response to the great challenges conveyed by this new era
characterised by the global market and the impressive advances of information and
communication technology [3]. Market globalisation, indeed, has offered to
companies the possibility to split geographically their production capacity;
business opportunities lead companies to work together in temporary
organisations; in the same firm, business units behave as autonomous profit centres
and compete with each other for the production capacity allocation. In other words,
REs represent production networks made of different and geographically dispersed
plants which can be reconfigured in order to gather a specific production process or
product family. However, the RE members need to be properly coordinated to
achieve reduction in lead times and costs, alignment of interdependent decision-
making processes, and improvement in the overall performance of each member,
as well as of the RE. In this context, operations management and coordination of
RE and RMS are challenging issues involving distributed problem-solving tasks.
Specifically, in production planning (PP) and control activities, the concern with
internal production planning is replaced by the complexity of the external supply
52 Production Planning in Production Networks
chain. Indeed, as soon as a manufacturing unit tries to achieve coordination with its
partners, it quickly faces difficulties associated with different operational
conventions, locally specific constraints, software legacy and properties,
conflicting objectives and misaligned incentives. This task becomes even more
difficult when each RE member or plant consists of reconfigurable production
systems; indeed, the reconfiguration capability makes planning and scheduling
processes even more complex. The distributed production system (DPS), which has
been considered here, is linked to the semiconductor component industry; indeed,
usually, companies belonging to such an iIndustry sector are often organised into
reconfigurable manufacturing units geographically dispersed. In particular,
companies have a divisional organisation and the top management is called a
corporate; each division is called a group and is in charge of a product family
commercialisation. Each group can fulfil the collected orders thanks to the
reconfigurable characteristics of the manufacturing plants. Reconfiguration skills
offer clear advantages to the enterprise while increasing the complexity of
production planning activities. Multi-agent systems (MAS) techniques have been
largely used for their suitability in modelling complex systems involving multiple
autonomous agents with internal knowledge and reasoning engines which
communicate and interact with each other by exchanging messages according to
specific protocols. This technology is strictly required for approaching this kind of
complex problem, as will be shown in the following sections.
annual quarter in which the assignment of plants to a group remains fixed, orders
of products belonging to a product family (group) must be allocated to the different
plants temporary assigned to the group [5]. Plants represent reconfigurable
production systems able to be reconfigured in the short period (within the three
months) in order to manufacture different types of product of the same part family.
Such a brief description demonstrates how the PP process in a distributed
organisation can become complex, multi-period, multi-decision and multi-issue
when a somewhat reconfigurable capability is considered.
Figure 5.1 reports an IDEF0 view of the PP process in reconfigurable
enterprises made up of DPS.
Each PP activity reported in Figure 5.1 is related to a different time horizon and
concerns different PP levels.
The top PP level (activity A1) starting from information on groups’ one-year
demand forecast and priorities for each group deriving from strategy
considerations, assigns the global ownership to groups. The output of activity A1
represents an input for A2 together with groups’ priorities and demand forecast for
the considered time horizon of three months. Reducing the forecast horizon, future
estimates are more reliable and at the high PP level a tuning in ownership
allocation is allowed. The medium PP level focuses on the same time horizon of
the previous level but it aims at assigning each plant to a group basing on the
output of activity A2. Low level and shop-floor level both concern real-time
planning issues: the first one allocates, for each group, orders to one of the plants
assigned to that group, while the second one is responsible, for each plant, for the
allocation of jobs to resources.
Global Ownership
Groups
1 year Ownership
demand
TOP PP Level
forecast
1
Groups Tools to allocate
priorities ownership
HIGH PP Level Re-modulated
ownership Parts
production caacity
2
Tools to re-
3-months Groups modulate Plant/Group
demand forecasts ownership allocation matrix
MEDIUM PP Reseource technology characteristics
Level
3
Production Planning in Production Networks
Order/Plant
LOW PP Level allocation
Parts
characteristics 4
this level the objective is to balance capacity among groups; this goal is obtained
through a bargaining process among the groups, which acting as sellers and
buyers, depending on the available capacity, negotiate by exchanging capacity
ownership and credits. DPP characterisation at this level is reported in Table 5.2.
plants of the group in order to satisfy orders’ and groups’ objectives. The
assignment will obviously consider, as in the previous level, logistic (the distance
between the plant and the final customer), economic (the demand elasticity of each
product) and technology issues (plant/product efficiency matrix and
reconfiguration costs) but, at this level, time is most of all a scarce resource.
Moreover, each plant does not know the price agreed with other plants, nor their
priorities; therefore, two situations can occur: orders or plants can represent the
scarce resource. It can happen that workload is greater than available capacity and
vice versa; however, this information is not known because it results as a private
one. Because a third part (a mediator) is not present, it can be argued that plants
behave as sellers and order as buyers because of the promises deriving from
previous level (price and priority). Summarising, at this level the objective is to
allocate actual orders to plants assigned to groups (order assignment); this goal is
obtained through a bargaining process among plants, which act as capacity sellers,
and the orders, which act as buyers. They bargain by exchanging production
capacity and price. DPP characterisation at this level is reported in Table 5.4.
The specific focus of this book concerns the design of a negotiational and game
theoretical mechanism for solving bargaining at the high and medium-level
production planning. This results will be benchmarked with a centralised model
with full knowledge. Low and shop-floor levels will be neglected because several
decentralised approaches have been proposed in the literature which can find
application in our proposal.
5.8 References
[1] US National Research Council (1998) Visionary manufacturing challenges for 2020.
National Academy, Washington, DC: 13–36
[2] Koren Y, Heisel U, Jovane F, Moriwaki T, Pritschow G, Ulsoy G, Van Brussel H
(1999) Reconfigurable manufacturing systems. Ann CIRP, 48/2: 527–541
[3] Wiendahl HP, Lutz S (2002) Production networks. Ann CIRP 51/2: 573–587
[4] Argoneto P, Bruccoleri M, Lo Nigro G, Perrone G, Noto La Diega S, Renna P,
Sudhoff W (2006) High level planning of reconfigurable enterprises: a game theoretic
approach. Ann CIRP Vol. 55/1
Distributed Production Planning in Reconfigurable Production Networks 61
6.1 Introduction
Production planning at medium term consists in what we have referred to as high-
level production planning in the previous chapter. As mentioned, at this level the
planning objective is to balance capacity among groups; this goal is obtained
through a bargaining process among groups, which, by acting as sellers and buyers
and accordin to the available capacity, negotiate for exchanging capacity
ownership and credits. In the following sections a set of distributed production
planning models for such a purpose will be discussed.
where Og is the ownership of the group g and Ctot is the total capacity the
company holds. At this point each group computes an index S g measuring the
difference between workloads and capacity:
Sg WLg C g (6.2)
Subsequently groups are identified and classified as overloaded
OG ^1,..., i ,..., N` , i.e. groups with Sg ! 0, or underloaded
UG ^1,..., j ,..., M` , with Sg 0. Afterwards, OG and UG groups compute
respectively the required capacity RC g and the offered capacity OC g :
RC g WLg C g (6.3)
OC g C g WLg (6.4)
residual capacity OC j which is offered by the j-th group is computed:
§ ... ... ... ·
¨ ¸
L ¨ ... cij ... ¸ ; (6.5)
¨ ... ... ... ¸
© ¹
2. in order to achieve the best capacity allocation solution, the following
MILP model is solved:
§ N M ·
min ¨ ¦¦ c ij xij ¸ , (6.6)
¨i 1 j 1 ¸
© ¹
Distributed Models for Planning Capacity at Medium Term 65
subject to:
N M
¦x
i 1
ij 1; ¦x
j 1
ij 1, if N = M (6.7)
N M
¦x
i 1
ij 1; ¦x
j 1
ij d 1, if N < M (6.8)
N M
¦ xij d 1;
i 1
¦x
j 1
ij 1, if N >M (6.9)
OC ir* j ^ `
min CC ir* , M rj (1 r PLi * ) , (6.16)
r
where CC are the i*-th group current credits. Indeed, each group
i*
If, also in this case, no agreement is reached, the process begins again
from point 6 until the end of i OG ;
7. the residual capacity and credits are uploaded for each group and the
mechanism starts from point 6.
A transfer utility game [1] is associated to the quadruple AG r ; in that, the whole
set of players are given by * r OG r UG r and the characteristic function Ȟ is
defined, given that groups i and j make a coalition, as follows:
°OCij r t j r if OC ij r t j r ! 0
v (i , j ) hij r ® (6.19)
°̄0 if OC ij r t j r d 0
The set of hij r defines the following assignment problem:
§ N M ·
max ¨ ¦¦ hij r zij ¸ (6.20)
¨i 1 j 1 ¸
© ¹
where,
zij ^
1, if i and j makes a coalition
0, otherwise , (6.21)
¦z
i 1
ij 1; ¦z
j 1
ij 1 , if N = M (6.22)
N M
¦z
i 1
ij 1; ¦z
j 1
ij d 1 , if N < M (6.23)
N M
¦
i 1
zij d 1; ¦z
j 1
ij 1 , if N >M (6.24)
After having created the assignment among groups, it is necessary to consider two
different situations depending on the value of the characteristic function.
In this case, the coalitional players are required to split the game surplus. In order
to do this, the optimising charge belonging to the core game [2] is computed.
According to Owen’s theorem [3], a core allocation, in a linear assignment game,
can be obtained starting from an optimal solution of the dual programming model:
§ N M ·
min ¨ ¦ yi ¦ y j ¸ , (6.25)
¨i 1 ¸
© j 1 ¹
subject to:
yi y j t hij r . (6.26)
Once the solution is calculated, the credits and the capacities are uploaded for all
the coalitional players.
5
UiOG B u ¦Pb
t 0
i t ,5 u , 0 d u d 1, (6.30)
U iOG
1
Qi
0,8
0,6
0,4
0,2
'
0
0 0,2 0,4 0,6 0,8 1 1,2
U jUG
0
0 ' 1
Figure 6.3 shows the bargaining set. Graphically it is the area under the curve and
is easy to see that, as requested by the Nash solution, it is convex and bounded.
1 U iOG
Bargaining set
0
0
U jUG 1
U iOG , U jUG being the fall-back outcome, i.e. the outcome that can result if the
bargaining breaks down. In this specific case, it is easy to demonstrate that
U iOG U jUG 0 . The result will be the additional credits (OC ij r t j r ) ' the
group i has to pay to the group j and, complementarily, the number of credits the j-
th group has to give up, (OC ij r t j r ) (1 ' ), in order to reach the agreement.
Finally, the actual exchanged credits will be OC ij r ' :
OC ij r ' OC ij r (1 ' ) (t rj ' ), (6.34)
If the j-th group do not have a sufficient amount of credits to allow the exchange,
the bargaining falls and the i-th group does not assign the requested capacity.
Finally, the residual capacity and credits are uploaded for each group involved in
the game and the algorithm starts again (r = r + 1), formulating a new assignment
game, until one of the following two conditions (no more workload excess or no
more extra capacity) comes true:
N M
r r
¦ RC
i 1
i
0; ¦ OC
j 1
j
0; (6.35)
For all different approaches above explained, the simulation environment consists
of the following objects, as also depicted in the class diagram of Figure 6.4:
the Schedule: this object is in charge of managing the sequence of events
during the simulation time;
72 Production Planning in Production Networks
the Model: this object handles the signals related to the orders, coordinates
the activities among groups and selects the strategies;
the Group: this object possesses all groups’ information and functions
necessary to the implementation;
the Statistical Analysis: this last object is dedicated to the analysis of the
groups’ performance.
The sequence diagram shown in Figure 6.5 refers to a generic order o, o =
1,..,O:
Model applies one of the three different approaches, depending on the considered
model: centralised, negotiational, game theoretical;
Performances communication: groups’ performances are communicated
to Statistical Analysis object;
Assignment communication: new capacity adjustment among groups is
communicated to Group object;
Statistical Analysis object uploads performances and carries on with the simulation
until the defined confidence interval is reached;
Statistical performances: performances are communicated to Schedule
object;
Schedule verifies the performances’ statistical significance;
Significance communication: Schedule communicates to Statistical
Analysis object the result of the previous check;
Final report is written.
6.7 Results
The results of 27 different combinations of input parameters for the centralised
(C.A.), negotiational (N.A.) and game-theoretical (G.A.) approaches are reported in
Appendix A. They are represented in tables indicating: the average value of the
unallocated capacity (Avg), the (half-width) confidence interval (Half), the number
of replications needed by the simulator to calculate it (Rep), the extreme values
(Min, Max) of the estimated parameter and the variance (Var). In order to analyse
the results, two different techniques have been used: the two-way Analysis of
Distributed Models for Planning Capacity at Medium Term 75
Variance (ANOVA) and the Design of Experiment (DoE). The first one leads us to
understand the dependence of the results from the variance of input parameters,
from the three different proposed models and, if there is, from their interaction.
Instead, DoE will lead us to comprehend the direction of this dependence.
6.7.1.1 Workload
Table 6.2 reports the result of the unallocated capacity (given in Appendix A)
rearranged to highlight the workload parameter. Indeed, in the rows of Table 6.2
we have the different levels of workload for each set of model; in the columns, on
the other hand, we have the levels for combinations of the other two input
parameters, P and C. Such combinations have been obtained as indicated in Table
6.3.
Table 6.4 shows all the mean values for each model and for each level of WL.
Data from this table suggest that the two decentralised approaches perform slightly
worse than the centralised approach, there being a reduction in performance of
about a 20% on average. This is quite a good performance considering the
distributed nature of the two approaches. Also no great difference is evident
between the two distributed approaches, namely the negotiation and the game
theoretical one.
76 Production Planning in Production Networks
1 2 3 4 5 6 7 8 9
W 51.04 39.16 34.10 51.54 34.31 34.65 49.98 38.84 34.48
C.A. B 41.88 27.78 21.69 42.72 28.20 20.66 41.86 26.32 21.48
S 36.43 18.49 8.74 35.88 18.67 8.45 35.22 18.59 8.76
W 67.73 43.64 35.61 64.86 35.10 34.89 67.27 43.12 36.15
G.A. B 59.13 31.56 21.57 58.88 31.65 21.73 57.86 30.51 21.74
S 52.23 20.90 8.53 55.79 21.77 8.35 53.60 20.53 9.05
W 65.83 43.88 36.76 66.14 43.32 34.80 67.61 44.58 36.66
N.A. B 58.57 31.37 22.00 57.72 30.19 21.93 57.64 30.40 21.06
S 51.28 20.53 8.56 53.39 21.07 8.60 53.23 20.61 8.69
Let us investigate deeply the obtained results. In particular, there are three sets of
hypotheses to consider; indeed, the null and alternative hypotheses for each set are
the following:
The main effect involves the independent variables one at a time. The
interaction is ignored for this part. Just the rows or just the columns are
used, not a mixture. This is the part which is similar to the one-way
ANOVA.
The interaction effect is the effect that one factor has on the other factor.
The degrees of freedom here are the product of the two degrees of
freedom for each factor.
The within variation is the sum of squares within each treatment group.
The total number of groups’ treatment is given by the product of the
number of the levels multiplied for each factor. The within variance is the
within variation divided by its degrees of freedom. The within group is
also called the error.
At the last column, there is an F-test for each of the hypotheses: it is the
mean square for each main effect and the interaction effect divided by the
within variance. The numerator degrees of freedom come from each
effect, and the denominator degrees of freedom are the degrees of
freedom for the within variance in each case.
78 Production Planning in Production Networks
SS df MS F-test F-crit D 5%
From the above results, we can see that only the main effect of WL is significant,
but the interaction between the input factors is not. That is, only the second null
hypothesis can be rejected: the workload means are not all equal. Often, the best
way of interpreting and understanding an interaction is by a graph. A two-factor
ANOVA with no significant interaction can be represented by two approximately
parallel lines, whereas a significant interaction results in a graph with non-parallel
lines. Because two lines will rarely be exactly parallel, the significance test on the
interaction is also a test of whether the two lines diverge significantly from being
parallel. If there is no interaction between the considered factors, each mean
reported in Table 6.7 is influenced only by the two factors in an additive way. For
example, if we consider A (factor in the column) and B (factor in the row) without
any interaction, we should obtain:
X ai b j X ai X b j X (6.39)
i.e.: if no interaction exists between A and B, each single considered value of the
table of means results from the sum of the means in the row and in the column
minus the grand mean. In other words, the values shown in Table 6.4 are the
observed values, while the estimated values calculated using Equation 6.40 are
reported in Table 6.7.
Therefore, it is possible to plot these values and verify that the obtained lines are
all parallel in both cases; this will confirm that there is no interaction between the
factors.
Distributed Models for Planning Capacity at Medium Term 79
50
45
40
Centralised
35 GameTheory
Negotiation
30
25
20
0 W
1 B
2 S
3 4
50
45
40
Centralised
35 Game Theory
Negotiation
30
25
20
0 1
W 2B 3S 4
The ANOVA test has been used to find out if there is a significant difference
between the considered groups of means. However, the ANOVA analysis simply
indicates if there is a difference between two or more groups of means, but it does
not tell us what mean is significantly different from the others. To understand it, in
the following, the Tukey test has been used. This is a test properly designed to
perform a pairwise comparison of the means to see where the significant difference
is; according to it, it is sufficient to simply calculate the T-critical value and the
80 Production Planning in Production Networks
difference between all possible pairs of means. Each difference is then compared to
the T-critical value: if this difference is larger than the Tukey value, the
comparison is significant (and it will be indicated by “*”), otherwise it is not.
sr2
T critical QD , p , ab( c 1) , (6.40)
k
being:
D is the selected probability (5%);
p is the simultaneously number of compared means;
ab(c 1) is the df of the within variance;
sr2 is the within variance;
Q is the studentised range statistic;
k is the number of the data necessary to calculate the means we are going
to compare.
Referring to the analysed case, we have:
226.66
Row factor Q0.05 ,3,72 3.39 T 3.39 9.80
27
226.66
Column factor Q0.05 ,3,72 3.39 T 3.39 9.80
27
226.66
Interaction Q0.05 ,9 ,72 4.53 T 4.53 22.70
9
Column factor W B S
B 11.04* 0 0
S 20.37* 9.34 0
Distributed Models for Planning Capacity at Medium Term 81
It is easy to see that, also with this test, the only influence on means we observe is
due to the column factor, i.e. to the main effect of WL, like already observed by
refusing the only null hypothesis 6.38.
Table 6.11 is referred to the groups’ interaction analysis:
Finally, given these results with a confidence interval equal to 5%, we can draw the
following conclusions:
there is no statistical difference between the performance estimated using
the centralised model and the two decentralised ones;
the variability of the input data (WL) significantly influences the response
of the systems;
the input data variability and the different models does not interact
significantly.
This considerations lead us to a very important result: given a fixed variability of
input data (WL) there is, statistically speaking, no difference between the three
proposed models. This is a really good result considering the distributed nature of
the negotiational and game-theoretical approaches.
6.7.1.2 Priority
Similarly to the workload analysis, we start filling in Table 6.12. In the rows we
have the levels of both considered factors (priority and type of model) and, in the
columns, the values of nine different replications obtained combining the other two
input parameters (WL, C) in a combinatorial way, as explained in Table 6.13.
82 Production Planning in Production Networks
1 2 3 4 5 6 7 8 9
W 51.04 39.16 34.10 41.88 27.78 21.69 36.43 18.49 8.74
C.A. B 51.54 34.31 34.65 42.72 28.20 20.66 35.88 18.67 8.45
S 49.98 38.84 34.48 41.86 26.32 21.48 35.22 18.59 8.76
W 67.73 43.64 35.61 59.13 31.56 21.57 52.23 20.90 8.53
G.A. B 64.86 35.10 34.89 58.88 31.65 21.73 55.79 21.77 8.35
S 67.27 43.12 36.15 57.86 30.51 21.74 53.60 20.53 9.05
W 65.83 43.88 36.76 58.57 31.37 22.00 51.28 20.53 8.56
N.A. B 66.14 43.32 34.80 57.72 30.19 21.93 53.39 21.07 8.60
S 67.61 44.58 36.66 57.64 30.40 21.06 53.23 20.61 8.69
1 2 3 4 5 6 7 8 9
Workload (WL) variance W W W B B B S S S
Ownership (C) variance W B S W B S W B S
The next step is again to refer to a table with all the mean values for each model
and for each level of P. Again, observing Table 6.12 and 6.14, it is possible to
conclude that the two distributed approaches perform slightly worse than the
centralised one by about 20%. Also in this case the performances of the two
decentralised approaches are very close each other.
W B S Mean
C.A. 31.03 30.57 30.62 30.74
G.A. 37.88 37.00 37.76 37.55
N.A. 37.64 37.46 37.83 37.65
Mean 35.52 35.01 35.40 35.31
Also in this case, there are three sets of hypotheses to consider, as shown above for
WL. The null and alternative hypothesis for each sets are given, also in this case, by
Equations 6.37 –6.39. Using the same notation asTable 6.5, we have:
Distributed Models for Planning Capacity at Medium Term 83
SS df MS F-Test F-crit D 5%
From the above results, we can see that no factor is significant, including the
interaction between them. Therefore, in this case, it is pointless to use a Tukey test,
because it is impossible to reject all null hypotheses reported in Equations 6.37–
6.39. To further support this consideration, the observed and the estimated values2
are plotted in Figures 6.8 and 6.9.
W B S Mean
C.A. 30.95 30.44 30.83 30.74
G.A. 37.75 37.25 37.64 37.55
N.A. 37.85 37.35 37.74 37.65
Mean 35.52 35.01 35.40 35.31
It is possible verify that the obtained lines are all parallel in both cases: this
confirms that there is no interaction between factors. These conclusions lead us to
understand, considering a confidence interval equal to 5%, that:
there is no statistical difference between the performance estimated using
the centralised model and the two decentralised ones;
the variability of the input data (P) does not significantly influence the
response of the systems;
the input data variability and the different used models does not interact
significantly.
These considerations lead us to another very important result: regardless the
variability of input data (P) there is, statistically speaking, difference between the
three proposed models.
39,00
38,00
37,00
36,00 Centralised
35,00 Game theory
34,00 Negotiation
33,00
32,00
31,00
30,00
W B S
39
38
37
36 Centralised
35 Game theory
34 Negotiation
33
32
31
30
W B S
6.7.1.3 Ownership
The last parameter to investigate is the ownership. Table 6.17 reports the data as
usual. In the rows we have the levels of both factors and, in the columns, the values
of nine different replications obtained combining the other two input parameters
(WL, P) in a combinatorial way, like explained in Table 6.18.
Distributed Models for Planning Capacity at Medium Term 85
1 2 3 4 5 6 7 8 9
W 51.04 51.54 49.98 41.88 42.72 41.86 36.43 35.88 35.22
C.A. B 39.16 34.31 38.84 27.78 28.20 26.32 18.49 18.67 18.59
S 34.10 34.65 34.48 21.69 20.66 21.48 8.74 8.45 8.76
W 67.73 64.86 67.27 59.13 58.88 57.86 52.23 55.79 53.60
G.A. B 43.64 35.10 43.12 31.56 31.65 30.51 20.90 21.77 20.53
S 35.61 34.89 36.15 21.57 21.73 21.74 8.53 8.35 9.05
W 65.83 66.14 67.61 58.57 57.72 57.64 51.28 53.39 53.23
N.A. B 43.88 43.32 44.58 31.37 30.19 30.40 20.53 21.07 20.61
S 36.76 34.80 36.66 22.00 21.93 21.06 8.56 8.60 8.69
1 2 3 4 5 6 7 8 9
Workload (WL) variance W W W B B B S S S
Priority (P) variance W B S W B S W B S
Table 6.19 shows the means for the data reported in Table 6.17. Also in this case
decentralised approaches perform slightly worse than the centralised and no great
difference can be measured between the two approaches.
Ownership W B S Mean
C.A. 42.95 27.82 21.45 30.74
G.A. 59.70 30.97 21.96 37.55
N.A. 59.05 31.77 22.12 37.65
Mean 53.90 30.19 21.84 35.31
SS df MS F-test F-crit D 5%
From the above results, we can see that all three null hypotheses can be rejected.
This means that not only the main effects of considered factors are significant, but
also their interaction. In this case, if we consider the observed values plot, we will
not obtain parallel lines, but divergent ones. Obviously, this consideration is not
true for the estimated values.
Ownership W B S Mean
C.A. 49.33 25.62 17.27 30.74
G.A. 56.14 32.42 24.08 37.55
N.A. 56.24 32.52 24.18 37.65
Mean 53.90 30.19 21.84 35.31
70
60
50
Centralised
40 Game theory
Negotiation
30
20
10
0
W B S
60
50
40 Centralised
Game theory
30 Negotiation
20
10
0
W B S
To better understand where this significant difference is located, we will use the
Tukey test. Referring to Formula 6.40, we have:
84.84
Row factor Q0.05 ,3,72 3.39 T 3.39 6.01
27
84.84
Column factor Q0.05 ,3,72 3.39 T 3.39 6.01
27
84.84
Interaction Q0.05 ,9 ,72 4.53 T 4.53 13.91
9
Column factor W B S
B 23.71* 0 0
S 32.06* 8.35* 0
88 Production Planning in Production Networks
It is easy to see that, also using this test, the influence on means we observe is due
by either the column and row factor, i.e. the main effect of O and the main effect of
the models, like already view refusing all hypotheses 6.37-6.39. Table 6.25 refers
to the interaction:
In this section, DoE is used to investigate in which way the input variables
influence the response, i.e. the unallocated capacity. In particular, a full factorial
experiment has been conducted: responses have been measure3 at all combinations
of the experimental factor levels. Factorial design allows us to understand the
simultaneous effects that several factors may have on the results. MinitabTM has
been used to analyse the obtained values and to build the following graphs.
3Each response is the estimated average of the unallocated capacity as explained in the
Section 6.6. Relative tables are reported in Appendix A.
Distributed Models for Planning Capacity at Medium Term 89
Centralised WL P C UC
S W S 8.744
S B S 8.451
S S S 8.762
WL P
40
35
Mean of Unallocated Capacity
30
25
20
W B S W B S
C
40
35
30
25
20
W B S
W B S W B S
50 WL
W
B
30 S
WL
10
50 P
W
B
30 S
P
10
Finally, Figure 6.14 shows the surface response of the models. The first pair of
plots shows how when the workload increases in variance, passing from S to W, the
performance deteriorates since the unallocated capacity grows. This trend is
confirmed observing the second pair of plots: in this case the two factors act
jointly.
In the last situation only the Ownership, when its variance increases, leads to
bad performance; Priority does not have any influence on the surface response.
6.7.2.2 Negotiation
Adopting the same methodology, it is possible to analyse the negotiational model
performance as summarized in Figures 6.15 and 6.16.
Distributed Models for Planning Capacity at Medium Term 91
S
C W
Priority, also in this case, plays a very marginal role. Its main effect and its
interaction is unimportant; therefore, the considerations made in the previous case
are still valid. In the following table the minimum values of UC are indicated and
the surfaces plots are reported in Figure 6.17. Also in this case, as the uncertainty
of the workload and the ownership increases, the negotiation model performance
deteriorates. It is to be noticed that performance deteriorates in a worse way than in
the centralised model. Therefore, the negotiation model is more sensitive to the
uncertainty.
92 Production Planning in Production Networks
WL P
60
50
40
Mean of Unallocated Capacity
30
20
W B S W B S
C
60
50
40
30
20
W B S
W B S W B S
WL
W
50
B
S
WL
25
0
P
W
50
B
S
P
25
Negotiation WL P C UC
S W S 8.557
S B S 8.603
S S S 8.688
S
C W
WL P
60
50
40
Mean of Unallocated Capacity
30
20
W B S W B S
C
60
50
40
30
20
W B S
W B S W B S
WL
W
50
B
S
WL
25
0
P
W
50
B
S
P
25
Game theory WL P C UC
S W S 8.528
S B S 8.353
S S S 9.052
Distributed Models for Planning Capacity at Medium Term 95
S
C W
6.8 References
[1] Fernandez FR, Hinojosa MA, Puerto J (2004) Set-valued TU-games. Eur J Oper Res
159 181–195
[2] Shapley LS, Shubik M (1972) The assignment game: the core. Int J Game Theory
1:111–130
[3] Owen G (1975) On the core of linear production games. Math Progr 9 358–37
[4] Nash J (1950) The bargaining problem. Econometrica, 18(2):155–162
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7
7.1 Introduction
Plant capacity allocation consists in what we have referred as medium-level
production planning in the general overview discussed in Chapter 5. As mentioned,
at this level the objective is to acquire actual production capacity through plant
assignment to groups; this goal is obtained through a bargaining process among the
groups, which act as buyers, and the plants, which act as a sellers of capacity. They
bargain by exchanging plant production capacity and price, which the buyers pay
to gain capacity.
¦x
g 1
gm 1 (7.3)
wgm t x gm k gm (7.4)
where:
k gm ^ 1, if in the antecedent annual quarter m was allocated to g
0, otherwise
(7.5)
Constraint 7.2 defines the decision variables; Constraint 7.3 expresses that each
plant can be assigned only to one group, while Constraints 7.4 and 7.5 are binary
variables that lead us to take into account the reconfiguration costs.
Distributed Models for Plant Capacity Allocation 99
r 1
call g is the capacity already allocated by the g-th group until round
r 1;
Dgmax ^ `
u
max Dgm
m
and Dgmin u
^ `
min Dgm
m
.
As can be observed in Equation 7.6, the price the group g offers to the plant m
increases according to the round of the negotiation (time-dependent tactic), while it
decreases according to the capacity already allocated by the group itself (resource-
dependent tactic).
r
W gm is the reactive function threshold. The plant m accepts the offer of
r r
group g if and only if pgm t W gm ;
pm* is a constant defined by plant m;
Rc is the reconfiguration cost, already defined;
V gm is the plant m variable costs, already defined;
the last term U mr can be expressed as:
ª r º
U mr U m «1 Imr » , where (7.8)
¬ rmax ¼
Gr r
Igm
Imr ¦G
g 1
r
, and (7.9)
r r 1
r
p gm pgm
Igm r 1 (7.10)
pgm
.
It represents the risk attitude of plant m at round r; it increases according to the
round itself (time-dependent tactic) and decreases with the average gradient
Imr (imitative tactic) between the prices that the groups offer at rounds r and r 1.
G r is the number of groups that are still negotiating at round r;
U m is a constant depending on the plant and it characterizes the decisional
parameter related to its own risk attitude.
The risk is related to a first in, first out (FIFO) discipline in allocating orders to the
plants; that is, throughout the annual quarter the groups allocate the actual
production orders first to those plants which have signed earliest the contract with
the group itself. Thus, plants that are allocated last have a higher risk of remaining
underloaded. Equation 7.7 shows that the utility threshold of the plant agents
increases according with their risk attitude (agent state), their efficiency in
producing product g, and the reconfiguration cost.
Um ' (7.13)
Ug being the Bernstein basis polynomials of degree t with Pt points and ' a
parameter that has been already defined in Equation 6.33.
Plant: this object represents the PAs set; it has all the information,
algorithms and functions needed for their implementation;
Statistical Analysis: this last object is dedicated to the analysis of groups’
and plants’ performance analysis.
The class diagram of Figure 7.1 shows the most relevant methods utilised in the
Java code to obtain the described simulation environment.
On the other hand, Figure 7.2 shows the sequence diagram; it is referred to a
generic order o, o = 1,..,O:
Distributed Models for Plant Capacity Allocation 103
An infinite number of credits have been supposed for each simulation experiment;
for each replication the following performance variables have been computed with
a confidence interval equal to 95%:
G
V ¦¦ Q
g 1 mg
m V gm , (7.14)
G
u
G ¦¦ Q
g 1 mg
m Dgm , (7.15)
G M
- ¦¦ w
g 1m 1
gm , (7.16)
G § ·
Z ¦W
g 1
¨ Rg ¦ Qm ¸ .
g
¨ mg
¸
(7.17)
© ¹
Equation 7.14 expresses the efficiency of the models in assigning plants to groups.
The lower its value, the higher the ability of the models to properly assign plants to
the respective group. On the other hand, Equation 7.15 takes into account the
transportation costs related to the distances existing between plants and regional
divisions, while Equation 7.16 provides a measure of the mean number of
reconfigurations obtained during the simulation. The last performance, i.e. the one
reported in Equation 7.17, is the cost of the difference between the requested and
the actual allocated capacity.
Distributed Models for Plant Capacity Allocation 105
7.7 Results
The simulation parameters as well as the results of the 27 different combinations of
input parameters for the centralised (C.A.), negotiational (N.A.) and game-
theoretical (G.A.) approaches are reported in Appendix B. Also in this case, a
proper analysis of the results has been carried out through the two-way Analysis of
Variance (ANOVA) and the Design of Experiment (DoE) for each estimated
performance.
The obtained results, rearranged in the following tables, can be considered like
a set of data drawn from three normal distributions with mean equal to the three
different grand mean (depending on the utilized model) and the same variance.
Each factor (i.e. independent variable) has three different levels; respectively, the
factor model has three levels corresponding to C.A., N.A., G.A. and factor input
parameter has also three levels corresponding to the variance wideness of the input
data, i.e. wide (W), bounded (B) and small (S) variance. The goal is to understand
in which way the input parameters affect the estimated performance measures.
7.7.1.1 Ownership
Table 7.2 reports in the rows the levels of the input factors and in the columns the
values of the nine different combinations of the other two input parameters (R, Q)
as explained in Table 7.3.
1 2 3 4 5 6 7 8 9
W 14.45 14.43 12.18 14.36 14.44 12.16 14.43 14.50 14.47
C.A. B 14.67 14.95 12.07 14.75 15.05 12.03 14.77 14.95 12.06
S 15.16 15.59 12.68 15.07 15.66 12.92 15.12 15.10 12.65
W 17.34 17.56 17.72 17.35 17.58 17.67 17.34 17.59 17.31
G.A B 17.64 17.85 18.04 17.59 17.96 17.89 17.48 17.96 17.99
S 17.94 18.77 18.77 17.90 18.65 19.16 17.91 17.92 18.94
W 15.60 15.74 15.95 15.64 15.70 15.71 15.68 15.60 16.50
N.A B 15.90 16.02 15.86 15.54 15.62 15.62 16.93 17.32 17.09
S 15.91 15.92 15.91 15.56 15.62 15.26 17.17 17.03 17.50
1 2 3 4 5 6 7 8 9
Risk attitude (R) variance W W W B B B S S S
Production capacity (Q) variance W B S W B S W B S
106 Production Planning in Production Network
Table 7.4 reports all the mean values for each model and for each level of the
ownership variance. This results will be deeply investigated in what follows.
Specifically, there are three sets of hypotheses to consider. The null and alternative
hypotheses for each set are the following:
SS df MS F-test F-crit D 5%
First factor 197.021 2 98.510 143.081* F2.72 3.13
Second factor 5.302 2 2.651 3.850* F2.72 3.13
Interaction Effect 1.458 4 0.364 0.529 F4.72 2.51
Within 49.572 72 0.688 – –
Total 253.352 80 –
From the analysis of Table 7.4, that only the main effects are significant, while the
interaction between them is not. That is, only the first two null hypotheses 7.18 and
7.19 can be rejected. Figures 7.3 and 7.44 report respectively the observed and
Distributed Models for Plant Capacity Allocation 107
estimated values, whose numerical values are reported in Table 7.6, from which it
is possible to observe the absence of interaction.
19,00
18,00
17,00
Centralised
16,00
Game Theory
15,00
Negotiation
14,00
13,00
12,00
0 W
1 B
2 S3 4
19,00
18,00
17,00
Centralised
16,00 Game Theory
Negotiation
15,00
14,00
13,00
0 W
1 B2 3S 4
As also done in Chapter 6, Table 7.7 shows the T-critical test values.
108 Production Planning in Production Network
G.A. 3.819* 0 0
N.A. 1.972* 1.848* 0
B 0.244 0 0
S 0.622* 0.377 0
By comparing data from Table 7.7 and Tables 7.8, 7.9 and 7.10 it appears quite
evident that, given a confidence interval equal to 5%,
there is statistical difference between the value of efficiency estimated
using the centralised model and the two decentralised ones and between them
also;
Distributed Models for Plant Capacity Allocation 109
the variability of the input data (C) significantly influences the response of
the system passing from W to S;
the input data variability and the different models used do not interact
significantly.
This considerations lead us to conclude that the centralised model really
behaves better with respect to the decentralised ones in the optimisation of the
efficiency. At the same time, a high variability of C seems to have a positive
influence on the estimated performance.
1 2 3 4 5 6 7 8 9
W 14.45 14.43 12.18 14.67 14.95 12.07 15.16 15.59 12.68
C.A. B 14.36 14.44 12.16 14.75 15.05 12.03 15.07 15.66 12.92
S 14.43 14.50 14.47 14.77 14.95 12.06 15.12 15.10 12.65
W 17.34 17.56 17.72 17.64 17.85 18.04 17.94 18.77 18.77
G.A. B 17.35 17.58 17.67 17.59 17.96 17.89 17.90 18.65 19.16
S 17.34 17.59 17.31 17.48 17.96 17.99 17.91 17.92 18.94
W 15.60 15.74 15.95 15.64 15.70 15.71 15.68 15.60 16.50
N.A. B 15.90 16.02 15.86 15.54 15.62 15.62 16.93 17.32 17.09
S 15.68 15.60 16.50 16.93 17.32 17.09 17.17 17.03 17.50
1 2 3 4 5 6 7 8 9
Ownership (C) variance W W W B B B S S S
Production capacity (Q) variance W B S W B S W B S
Table 7.13 reports the mean values for the performance V. As the reader can notice
from Table 7.13 also in this case efficiency seems to be smaller with the
centralised models. This conclusion will be deeply investigated by performing a
two-way ANOVA.
110 Production Planning in Production Network
Specifically, there are three sets of hypothesis to consider. The null and alternative
hypothesis for each sets are given, also in this case, by 7.18–7.20. Table 7.14
reports the results of the ANOVA analysis in this case.
SS Df MS F-Test F-crit D 5%
First factor 198.034 2 99.017 133.140* F2.72 3.13
Second factor 1.646 2 0.823 1.107 F2.72 3.13
Interaction Effect 2.939 4 0.735 0.988 F4.72 2.51
Within 53.547 72 0.744 – –
Total 256.166 80 –
From the above results it is quite evident that only one factor is significant for the
estimated parameter. In order to strongly support this conclusion, also in this case,
the Tukey test has been carried out. The T-values of the test are reported in Table
7.15, while Table 7.16 reports the differences of the means. The Tukey test
confirms the result of the two-way ANOVA. Finally, Table 7.17 reports the
interaction analysis.
Table 7.15. T-values
Factor Q-value T-value
Row factor Q0.05 ,3,72 3.39 T 0.563
Column factor Q0.05 ,3,72 3.39 T 0.563
Interaction Q0.05 ,9 ,72 4.53 T 1.302
G.A. 3.820* 0 0
N.A. 2.155* 1.665* 0
Distributed Models for Plant Capacity Allocation 111
B–C.A. 0.029 – – – – – – –
The obtained results, with a confidence interval equal to 5%, lead us to the
following conclusions:
there is a statistical difference between the performance estimated using
the centralised model and the two decentralised ones and between them also;
the variability of the input data (R) does not significantly influence the
response of the system;
the input data variability and the different models used do not interact
significantly.
These considerations lead us to conclude that, also in this case, high variability of
input data and the centralised model minimize the efficiency.
1 2 3 4 5 6 7 8 9
W 14.45 14.36 14.43 14.67 14.75 14.77 15.16 15.07 15.12
C.A. B 14.43 14.44 14.50 14.95 15.05 14.95 15.59 15.66 15.10
S 12.18 12.16 14.47 12.07 12.03 12.06 12.68 12.92 12.65
W 17.34 17.35 17.34 17.64 17.59 17.48 17.94 17.90 17.91
G.A. B 17.56 17.58 17.59 17.85 17.96 17.96 18.77 18.65 17.92
S 17.72 17.67 17.31 18.04 17.89 17.99 18.77 19.16 18.94
W 15.60 15.64 15.68 15.90 15.54 16.93 15.91 15.56 17.17
N.A. B 15.74 15.70 15.60 16.02 15.62 17.32 15.92 15.62 17.03
S 15.95 15.71 16.50 15.86 15.62 17.09 15.91 15.26 17.50
1 2 3 4 5 6 7 8 9
Ownership (C) variance W W W B B B S S S
Risk attitude (R) variance W B S W B S W B S
SS df MS F-Test F-crit D 5%
First factor
197.021 2 98.510 302.927* F2.72 3.13
Second factor
6.961 2 3.480 10.703* F2.72 3.13
Interaction effect
25.956 4 6.489 19.954* F4.72 2.51
23.414 72 0.325 - -
Within
253.352 80 -
Total
Distributed Models for Plant Capacity Allocation 113
Also in this case, the Tukey test, whose T-values are reported in Table 7.23, is
carried out to better understand where this significance is located. Mean
differences are reported in Tables 7.24 and 7.25 and the test brings us to conclude
that the influence on means is due to either the column or the row factor; this
allows us to reject the main effects null hypothesis. On the other hand, Table 7.26
reports the interaction data and it allows us to reject also the interaction null
hypotheses.
19
18
17
Centralised
16 Game theory
Negotiation
15
14
13
12
W B S
19
18
17
Centralised
16 Game theory
Negotiation
15
14
13
12
W B S
G.A. 3,820* 0 0
N.A. 1,972* 1,848* 0
B 0,216 0 0
S 0,485* 0,701* 0
It is easy to see that, also using this test, the influence on means we observe is due
to either the column or the row factor, as already viewed refusing all hypotheses
7.18–7.20. The last table refers to the interaction.
B –C.A. 0.209 – – – – – – –
the variability of the input data (Q) significantly influences the response
of the systems, specifically when the variance diminishes passing from W
to S and from B to S;
the input data variability and the different models interact significantly
combining their effects on the estimated performance.
In the following analysis, DoE is used to investigate in which way the input
variables influence the efficiency V .
C R
11,5
11,0
10,5
Mean of Distances
10,0
9,5
W B S W B S
Q
11,5
11,0
10,5
10,0
9,5
W B S
W B S W B S
C
15,0
W
B
C 13,5
S
12,0
R 15,0
W
B
R 13,5
S
12,0
As the reader can notice, efficiency, V, rapidly decreases when the production
capacity of plants (Q) has a small variance. The other two parameters, and their
interaction, have less influence. These results are reported in the surface response
curve of Figure 7.9.
Distributed Models for Plant Capacity Allocation 117
C R
16,8
16,5
16,2
15,9
Mean Efficiency
15,6
W B S W B S
Q
16,8
16,5
16,2
15,9
15,6
W B S
W B S W B S
C
W
16,8
B
S
C 16,2
15,6
R
W 16,8
B
R
S
16,2
15,6
S
R W
C R
18,50
18,25
18,00
17,75
Mean of Efficiency
17,50
W B S W B S
Q
18,50
18,25
18,00
17,75
17,50
W B S
W B S W B S
C
W 18,6
B
C
S 18,0
17,4
R
18,6
W
B
R 18,0
S
17,4
B S
R W
7.7.3.1 Ownership
Table 7.27 reports, in the rows, the levels of the input factors while in the columns
the values of the nine different combinations of the other two input parameters (R,
Q) as explained in Table 7.3.
Table 7.28 reports all the mean values for each model and for each level of the
ownership variance. This results will be deeply investigated in what follows.
The null and alternative hypotheses have been already defined in 7.18–7.20.
The ANOVA table we obtain is reported in Table 7.29.
122 Production Planning in Production Network
1 2 3 4 5 6 7 8 9
W 11.09 11.13 9.48 11.02 11.09 9.47 11.04 11.14 11.08
C.A. B 11.30 11.50 9.40 11.32 11.61 9.35 11.26 11.54 9.30
S 11.67 11.99 9.59 11.58 12.07 9.89 11.61 11.62 9.64
W 13.23 13.36 13.47 13.24 13.52 13.61 13.23 13.40 13.26
G.A. B 13.52 13.58 13.59 13.41 13.65 13.70 13.33 13.62 13.81
S 13.50 13.57 13.67 13.47 13.60 13.69 13.74 13.48 13.60
W 12.15 12.22 12.30 12.19 12.25 12.18 12.19 12.07 13.08
N.A. B 12.37 12.48 12.47 12.18 12.24 12.35 13.39 13.59 13.54
S 12.46 12.63 12.60 12.29 12.38 12.24 13.57 13.54 13.80
SS df MS F-test F-crit D 5%
First factor 99.713 2 49.856 126.228* F2.72 3.13
Second factor 1.873 2 0.936 2.371 F2.72 3.13
Interaction effect 0.617 4 0.154 0.391 F4.72 2.51
Within 28.438 72 0.395 – –
Total 130.640 80 –
From the analysis of Table 7.28, only the main effect related to the first factor is
significant: the first null hypothesis 7.18 can be rejected. Considering the values
reported in Table 7.28 we can graphically observe the absence of interaction (lines
are approximately parallel) in the Figure 7.16.
Distributed Models for Plant Capacity Allocation 123
14,00
13,00
Centralised
12,00 Game Theory
Negotiation
11,00
10,00
0 1
W 2
B 3S 4
Referring to the analysed case we can calculate the T-critical values and the
following table.
G.A. 2.69* 0 0
N.A. 1.777* 0.892* 0
benchmark (C.A.) and the two decentralised approaches, but no great difference
can be measured among G.A. and N.A.
B -C.A. 0.004 - - - - - - -
1 2 3 4 5 6 7 8 9
W 11.09 11.13 9.48 11.30 11.50 9.40 11.67 11.99 9.59
C.A. B 11.02 11.09 9.47 11.32 11.61 9.35 11.58 12.07 9.89
S 11.04 11.14 11.08 11.26 11.54 9.30 11.61 11.62 9.64
W 13.23 13.36 13.47 13.52 13.58 13.59 13.50 13.57 13.67
G.A. B 13.24 13.52 13.61 13.41 13.65 13.70 13.47 13.60 13.69
S 13.23 13.40 13.26 13.33 13.62 13.81 13.74 13.48 13.60
W 12.15 12.22 12.30 12.37 12.48 12.47 12.46 12.63 12.60
N.A. B 12.19 12.25 12.18 12.18 12.24 12.35 12.29 12.38 12.24
S 12.19 12.07 13.08 13.39 13.59 13.54 13.57 13.54 13.80
Table 7.33 reports the mean values for the performanceG. As the reader can notice
from Table 7.33 also in this case distance seems to be smaller with the centralised
models. This conclusion will be deeply investigated by performing a two-way
ANOVA.
Distributed Models for Plant Capacity Allocation 125
SS df MS F-test F-crit D 5%
First factor 99.713 2 49.856 136.771* F2.72 3.13
Second factor 1.800 2 0.900 2.469 F2.72 3.13
Interaction effect 2.882 4 0.720 1.977 F4.72 2.51
Within 26.246 72 0.365 – –
Total 130.640 80 –
From the above results it is quite evident that only one factor is significant for the
estimated parameter. In order to strongly support this conclusion, also in this case,
the Tukey test has been carried out. The T-values of the test are reported in Table
7.35, while Table 7.35 reports the differences of the means. The Tukey test
confirms the result of the two-way ANOVA. Finally, Table 7.37 reports the
interaction analysis.
G.A. 2.669* 0 0
N.A. 1.777* 0.892* 0
14,00
13,00
Centralised
12,00 Game Theory
Negotiation
11,00
10,00
0 1
W B2 S3 4
Figure 7.17. Observed values
It is easy to see that there is some interaction between factors but, with the utilised
confidence interval, it cannot be considered relevant for our analysis.
Consequently, with a confidence interval equal to 5%, we can draw the same
conclusions as reported in the previous section.
1 2 3 4 5 6 7 8 9
W 11.09 11.02 11.04 11.30 9.40 9.35 11.67 9.59 9.89
C.A. B 11.13 11.02 11.04 11.50 11.32 11.26 11.99 11.58 11.61
S 9.48 9.47 11.14 9.40 9.35 11.54 9.59 9.89 11.62
W 13.23 13.24 13.23 13.52 13.41 13.33 13.50 13.47 13.74
G.A. B 13.36 13.52 13.40 13.58 13.65 13.62 13.57 13.60 13.48
S 13.47 13.61 13.26 13.59 13.70 13.81 13.67 13.69 13.60
W 12.15 12.19 12.19 12.37 12.18 13.39 12.46 12.29 13.57
N.A. B 12.22 12.25 12.07 12.48 12.24 13.59 12.63 12.38 13.54
S 12.30 12.18 13.08 12.47 12.35 13.54 12.60 12.24 13.80
The next step is to create a table with all the mean values.
W B S Mean
C.A.
10.48 11.38 10.16 10.68
G.A.
13.41 13.53 13.60 13.51
N.A.
12.53 12.60 12.73 12.62
Mean
12.14 12.50 12.16 12.27
In this case, from Table 7.40, we can see that all three null hypotheses can be
rejected. This means that not only the main effects of the considered factor are
significant, but also their interaction. In this case, if we consider the observed
values plot, we will not obtain parallel lines, but divergent ones. Obviously, this
consideration is not true for the estimated values reported in Table 7.41. This
graphical analysis is reported in Figures 7.18 and 7.19.
SS df MS F-test F-crit D 5%
First factor
113.571 2 56.786 174.283* F2.72 3.13
Second factor
2.237 2 1.118 3.432* F2.72 3.13
Interaction Effect
5.306 4 1.326 4.071* F4.72 2.51
23.459 72 0.326 – –
Within
144.573 80 –
Total
W B S Mean
C.A.
10.55 10.91 10.57 10.68
G.A.
13.38 13.75 13.41 13.51
N.A.
12.49 12.86 12.52 12.62
Mean
12.14 12.50 12.16 12.27
Also in this case, the Tukey test, whose T-values are reported in Table 7.42, is
carried out to better understand where this significance is located. Mean
differences are reported in Tables 7.43 and 7.44 and the reader can notice how the
test brings us to conclude that the influence on means is due to either the column or
the row factor; this allows us to reject the main effects null hypothesis. On the
other hand, Table 7.45 reports the interaction data and it allows us to reject also the
interaction null hypotheses.
14,00
13,00
Centralised
12,00 Game Theory
Negotiation
11,00
10,00
0 W
1 2B 3S 4
Figure 7.18. Observed values
Distributed Models for Plant Capacity Allocation 129
14,00
13,00
Centralised
12,00 Game Theory
Negotiation
11,00
10,00
0 W
1 2B S
3 4
Figure 7.19. Estimated values
G.A. 2.836* 0 0
N.A. 1.944* 0.892* 0
B 0.374* 0 0
S 0.024 0.340 0
Table 7.45 refers to the interaction. In this case, the conclusions we can draw are:
there is a statistical difference between the performance estimated using
the centralised model and the two decentralised ones. There is a difference
also considering the G.A. and the N.A.;
the variability of the input data (Q) significantly influences the response
of the systems, especially passing from W to B;
the input data variability and the different models interact significantly
and, therefore, influence the value of the estimated performance.
Specifically, the centralised approach with a small variance of input data leads
us to obtain the minimum value of the performance. The negotiational approach
works better with respect to the game-theoretical one: the variability of Q does not
significantly influence the results.
130 Production Planning in Production Network
B-C.A. 0.90* – – – – – – –
In the following analysis, DoE is used to investigate in which way the input
variables influence the distance.
C R
11,5
11,0
10,5
10,0
Mean of Distances
9,5
W B S W B S
Q
11,5
11,0
10,5
10,0
9,5
W B S
W B S W B S
12
C
W
B 11
S
10
12
R
W
B 11
R S
10
As the reader can notice, distance rapidly diminishes when the production capacity
of plants (Q) have a small variance. The other two parameters, and their
interaction, have less influence on the estimated performance. In Figure 7.22 the
surfaces response of the model are depicted.
S
B S
R W
C R
13,2
12,9
12,6
Mean of Distances
12,3
W B S W B S
Q
13,2
12,9
12,6
12,3
W B S
W B S W B S
C 13,5
W
B
13,0
S
C
12,5
R 13,5
W
B 13,0
R S
12,5
B S
R W
C R
13,60
13,55
13,50
13,45
Mean of Distances
13,40
W B S W B S
Q
13,60
13,55
13,50
13,45
13,40
W B S
W B S W B S
C
W 13,6
B
S
C
13,4
13,2
R
W 13,6
B
R S
13,4
13,2
S
R W
7.7.5.1 Ownership
Table 7.46 reports, in the rows, the levels of the input factors and in the columns
the values of the nine different combinations of the other two input parameters
(R,Q) as explained in Table 7.3.
Next step is to calculate a table with all the mean values for each model and for
each level of C : in this way it will be easier to formulate and verify the
hypotheses 7.18 –7.20 related to the two-way ANOVA.
From the analysis of Table 7.48 results that not only the main effects are
significant, but the interaction between them also. That is, all the three null
hypothesis 7.18 –7.20 can be rejected. Figures 7.29 and 7.30 report respectively the
observed and estimated values, whose numerical values are reported in Table 7.49,
from which it is possible to observe the absence of interaction.
The estimated values are reported in Table 7.49.
Distributed Models for Plant Capacity Allocation 137
1 2 3 4 5 6 7 8 9
W 8.63 8.83 6.68 8.58 8.77 6.76 8.61 8.74 8.51
C.A. B 8.44 8.57 5.70 8.48 8.62 5.88 8.51 8.65 5.67
S 8.36 8.72 4.53 8.48 8.69 4.54 8.35 8.37 4.59
W 7.31 7.30 7.06 7.30 7.17 7.05 7.31 7.11 7.35
G.A. B 6.09 5.47 5.20 6.02 5.51 5.41 6.08 5.39 5.21
S 4.37 3.03 2.44 4.37 3.01 2.72 4.38 4.41 2.49
W 8.39 8.52 8.62 7.29 7.56 7.37 7.51 7.29 6.04
N.A. B 7.22 7.35 7.16 6.00 5.97 6.09 4.60 4.35 4.16
S 6.25 6.12 6.18 4.83 4.56 4.71 3.19 3.15 2.30
SS df MS F-test F-crit D 5%
First factor 73.123 2 36.561 27.633* F2.72 3.13
Second factor 92.136 2 46.068 34.817* F2.72 3.13
Interaction effect 18.285 4 4.571 3.455* F4.72 2.51
Within 95.265 72 1.323 - -
Total 278.809 80 -
Referring to the analysed case we can calculate the T-critical values reported in
Table 7.50.
Using data reported in Table 7.47, we obtain what is reported in Table 7.51 and
7.52.
G.A. 2.247* 0 0
N.A. 1.648* 0.599 0
7
Centralised
6 Game Theory
Negotiation
5
3
0 W
1 2B 3S 4
Figure 7.29. Observed values
Distributed Models for Plant Capacity Allocation 139
10
7 Centralised
Game Theory
6
Negotiation
5
3
0 1
W 2
B 3S 4
B 1.329* 0 0
S 2.612* 1.284* 0
Given these results with a confidence interval equal to 5%, we can draw the
following conclusions:
there is a statistical difference between the performance estimated using
C.A. and the two decentralized ones but not between G.A. and N.A.;
140 Production Planning in Production Network
the variability of the input data (C) significantly influences the response of
the system;
the input data variability and the different models used interact
significantly in the performance evaluation.
These considerations lead us to a very important result: there is, statistically
speaking, no difference between the two proposed decentralised models. The better
one proves to be the G.A., and in a particular case, i.e. for small variability of input
data, this approach leads us to obtain the minimum value of the number of
reconfigurations. This is a really good result considering the distributed nature of
this approach: it can be utilised to reduce to the minimum value the global number
of reconfigurations.
1 2 3 4 5 6 7 8 9
W 8.63 8.83 6.68 8.44 8.57 5.70 8.36 8.72 4.53
C.A. B 8.58 8.77 6.76 8.48 8.62 5.88 8.48 8.69 4.54
S 8.61 8.74 8.51 8.51 8.65 5.67 8.35 8.37 4.59
W 7.31 7.30 7.06 6.09 5.47 5.20 4.37 3.03 2.44
G.A. B 7.30 7.17 7.05 6.02 5.51 5.41 4.37 3.01 2.72
S 7.31 7.11 7.35 6.08 5.39 5.21 4.38 4.41 2.49
W 8.39 8.52 8.62 7.22 7.35 7.16 6.25 6.12 6.18
N.A. B 7.29 7.56 7.37 6.00 5.97 6.09 4.83 4.56 4.71
S 7.51 7.29 6.04 4.60 4.35 4.16 3.19 3.15 2.30
The null and alternative hypotheses to consider for each set are given, also in this
case, by 7.18 –7.20.
SS df MS F-test F-crit D 5%
First factor 73.123 2 36.561 15.009* F2.72 3.13
Second factor 7.626 2 3.813 1.565 F2.72 3.13
Interaction effect 22.668 4 5.667 2.586* F4.72 2.51
Within 175.391 72 2.436 – –
Total 278.809 80 –
From the above results it is evident that only one factor is significant for the
estimated parameter, but also the interaction plays a very important role. In order
to strongly support this conclusion, also in this case, the Tukey test has been
carried out. The T-values of the test are reported in Table 7.58, while Table 7.59
reports the differences of the means. The Tukey test confirms the result of the two-
way ANOVA. Finally, Table 7.60 reports the interaction analysis.
Figure 7.32, whose numerical values are reported in Table 7.57, shows the absence
of interaction given by the plotted parallel lines.
G.A. 2.247* 0 0
N.A. 1.648* 0.599 0
Centralised
6 Game Theory
Negotiation
4
0 W
1 B
2 3S 4
Figure 7.31. Observed values
7 Centralised
Game Theory
6 Negotiation
4
0 W
1 2B 3S 4
Figure 7.32. Estimated values
Finally, given these results with a confidence interval equal to 5%, we can draw the
following conclusions:
there is a statistical difference between the performance estimated using
the centralised model and the two decentralised ones but not between G.A.
and N.A.;
the variability of the input data (R) does not significantly influence the
response of the systems;
the input data variability and the different models interact significantly.
These considerations lead us to the same conclusions as shown in the previous
section: G.A. is the best approach in optimising the global number of
reconfiguration.
The next step is to calculate a table with all the mean values for each model and for
each level of Q .
Again, the nulls and alternative hypotheses for each set are given by 7.18 –7.20.
From the results reported in figure 7.63, we can see that only the main effects
are significant, but the interaction between them is not (even if its value is very
close to the one of the threshold. This nearness has its effect on the graphs of mean
values). That is, only the first two null hypotheses 7.18 and 7.19 are rejected. The
estimated values are reported in Table 7.64, while the graphical representations of
Tables 7.62 and 7.643 are reported, respectively, in Figures 7.33 and 7.34.
SS df MS F-test F-crit D 5%
First factor 73.123 2 36.561 16.731* F2.72 3.13
Second factor 26.631 2 13.316 6.093* F2.72 3.13
Interaction effect 21.714 4 5.429 2.484 F4.72 2.51
Within 157.340 72 2.185 – –
Total 278.809 80 –
Distributed Models for Plant Capacity Allocation 145
Also in this case, the Tukey test, whose T-values are reported in Table 7.65, is
carried out to better understand where this significance is located.
Mean differences are reported in Tables 7.66 and 7.67 and the reader can notice
how the test allows us to conclude that the influence on means is due to either the
column or the row factors; this brings us to reject main effects null hypotheses.
G.A. 2.247* 0 0
N.A. 1.648* 0.599 0
B 0.138 0 0
S 1.279* 1.141* 0
146 Production Planning in Production Network
7 Centralised
Game Theory
6 Negotiation
4
0 1
W 2
B 3S 4
7 Centralised
Game Theory
6 Negotiation
4
0 W
1 B
2 S
3 4
Also in this last case, the conclusions we can highlight are the same as the previous
two sections. The only difference consists in the influence that the variability of
input data plays in the estimation of the performance. Passing from W to S and
from B to S there is a relevant reduction of the number of reconfigurations.
In the following analysis, DoE is used to investigate in which way the input
variables influence the number of reconfigurations.
C R
9
8
Mean of Reconfigurations
W B S W B S
Q
9
W B S
W B S W B S
C
8
W
B
C
S 6
4
R 8
W
R
B
6
S
to show some graphs representing the surface response of the model reported in
Figure 7.37.
B B S
R W
C R
8
6
Mean of Reconfiguration
W B S W B S
Q
8
W B S
W B S W B S
C 8
W
B 6
C S
4
R 8
W
B 6
R
S
4
S
B S
R W
C R
7
5
Mean of Reconfiguration
3
W B S W B S
Q
7
3
W B S
W B S W B S
C
W 6
B
S
C
4
2
R
W 6
B
R S
4
B S
R W
7.7.7.1 Ownership
To start with the analysis, Table 7.69 has been taken into consideration. In the rows
we have the levels of both considered factors and, in the columns, the values of the
nine different replications obtained combining the other two input parameters
(R,Q) in a combinatorial way.
The next step is to calculate a table with all the mean values for each model and
for each level of C : in this way it will be easier to formulate and verify the
hypothesis related to the two-way ANOVA.
154 Production Planning in Production Network
1 2 3 4 5 6 7 8 9
W 52.84 46.06 54.88 53.34 45.95 56.81 53.36 46.86 54.36
C.A. B 43.52 33.20 44.26 42.49 32.36 43.91 43.39 32.65 44.52
S 31.64 19.68 35.95 31.06 19.80 36.80 32.12 32.09 35.35
W 86.18 93.29 86.18 116.24 92.72 86.32 114.49 93.14 115.08
G.A. B 97.42 71.64 64.13 96.17 71.42 64.39 96.28 71.70 65.64
S 86.26 57.34 51.57 84.64 57.83 52.35 84.89 85.35 51.77
W 99.45 78.21 72.40 99.62 79.56 73.29 100.04 79.07 100.97
N.A. B 90.71 66.76 60.80 90.96 67.99 60.64 91.44 69.22 62.96
S 80.35 54.68 48.36 80.85 54.54 48.01 80.98 79.68 50.35
SS df MS F-test F-crit D 5%
First factor 25685.835 2 12842.917 86.727* F2.72 3.13
Second factor 8370.568 2 4185.284 28.263* F2.72 3.13
Interaction Effect 274.463 4 68.616 0.463 F4.72 2.51
Within 10662.069 72 148.084 – –
Total 44992.935 80 –
From the results reported in Table 7.71, we can see that only both main effects are
significant, their interaction is not. That is, only first two null hypothesis 7.18 and
7.19 are rejected. The estimated values are reported in the following Table 7.72.
Distributed Models for Plant Capacity Allocation 155
W B S Mean
C.A.
54.00 38.81 29.32 40.71
G.A.
94.57 79.38 69.88 81.28
N.A.
88.18 72.99 63.49 74.89
Mean
78.92 63.72 54.23 65.62
By plotting these values, see Figures 7.44 and 7.45, it is easy to observe the
absence of interaction as highlighted above.
Referring to the analyzed case we can calculate the T-critical values reported in
Table 7.73.
105
95
85
75 Centralised
65 Game Theory
55 Negotiation
45
35
25
0 W
1 2B 3S 4
Figure 7.44. Observed values
156 Production Planning in Production Network
105
95
85
75 Centralised
65 Game Theory
55 Negotiation
45
35
25
0 W
1 2B 3S 4
Figure 7.45. Estimated values
G.A. 40.56* 0 0
N.A. 34.17* 6.39 0
B 15.19* 0 0
S 24.68* 9.49* 0
Finally, given these results with a confidence interval equal to 5%, we can draw the
following conclusions.
there is a statistical difference between the performance estimated using
the centralised model and the two decentralised ones. Between the last
two, the existing difference is not relevant;
the variability of the input data (C) significantly influence the response of
the systems;
the input data variability and the different used models do not interact
significantly.
The centralised model proves to be the best one in the optimization of this
performance. N.A. acts, statistically speaking, in the same way as G.A.. For all
Distributed Models for Plant Capacity Allocation 157
B-C.A. 11 .574 – – – – – – –
1 2 3 4 5 6 7 8 9
W 52.84 46.06 54.88 43.52 33.20 44.26 31.64 19.68 35.95
C.A. B 53.34 45.95 56.81 42.49 32.36 43.91 31.06 19.80 36.80
S 53.36 46.86 54.36 43.39 32.65 44.52 32.12 32.09 35.35
W 86.18 93.29 86.18 97.42 71.64 64.13 86.26 57.34 51.57
G.A. B 116.24 92.72 86.32 96.17 71.42 64.39 84.64 57.83 52.35
S 114.49 93.14 115.08 96.28 71.70 65.64 84.89 85.35 51.77
W 99.45 78.21 72.40 90.71 66.76 60.80 80.35 54.68 48.36
N.A. B 99.62 79.56 73.29 90.96 67.99 60.64 80.85 54.54 48.01
S 100.04 79.07 100.97 91.44 69.22 62.96 80.98 79.68 50.35
The next step is to create Table 7.78 with all the mean values for each model and
for each level of R : in this way it will be easier to formulate and verify the
hypothesis related to the two-way ANOVA whose results are reported in Table
7.79.
158 Production Planning in Production Network
There are three sets of hypothesis to consider, like above showed for Ownership.
The null and alternative hypothesis for each set are given, also in this case, by
Equations 7.18–7.20.
SS df MS F-test F-crit D 5%
First factor 25685.803 2 12842.902 49.692* F2.72 3.13
Second factor 530.221 2 265.116 1.027 F2.72 3.13
Interaction effect 168.583 4 42.145 0.163 F4.72 2.51
Within 18608,295 72 258,448 – –
Total 44992,934 80 –
From the above results, we can see that only the first factor is significant with its
main effect. Given this result we can plot the (means of) observed values and their
estimated ones (see Figures 7.46 and 7.47).
W B S Mean
C.A. 38.34 39.54 44.26 40.71
G.A. 78.90 80.10 84.83 81.28
N.A. 72.51 73.71 78.44 74.89
Mean 63.25 64.45 69.18 65.62
Distributed Models for Plant Capacity Allocation 159
90
80
70
Centralised
60 Game Theory
Negotiaton
50
40
30
0 W
1 B
2 S3 4
90
80
70
Centralised
60 Game Theory
Negotiation
50
40
30
0 W
1 2B 3S 4
Referring to the analysed case we can calculate the T-critical values reported in
Table 7.81.
G.A. 40.56* 0 0
N.A. 34.17* 6.39 0
Given these results with a confidence interval equal to 5%, we can conclude that
the only relevant difference is between the performance estimated using the
centralised model and the two decentralised ones. G.A. and N.A. are statistically
equivalent.
1 2 3 4 5 6 7 8 9
W 52.84 53.34 53.36 43.52 42.49 43.39 31.64 31.06 32.12
C.A. B 46.06 45.95 46.86 33.20 32.36 32.65 19.68 19.80 32.09
S 54.88 56.81 54.36 44.26 43.91 44.52 35.95 36.80 35.35
W 86.18 116.24 114.49 97.42 96.17 96.28 86.26 84.64 84.89
G.A. B 93.29 92.72 93.14 71.64 71.42 71.70 57.34 57.83 85.35
S 86.18 86.32 115.08 64.13 64.39 65.64 51.57 52.35 51.77
W 99.45 99.62 100.04 90.71 90.96 91.44 80.35 80.85 80.98
N.A. B 78.21 79.56 79.07 66.76 67.99 69.22 54.68 54.54 79.68
S 72.40 73.29 100.97 60.80 60.64 62.96 48.36 48.01 50.35
There are three sets of hypotheses to consider. The null and alternative hypotheses
for each set are given by Equations 7.18–7.20. The ANOVA table we obtain is:
SS df MS F-test F-crit D 5%
First factor 25685.83 2 12842.92 75.55* F2.72 3.13
Second factor 4638.21 2 2319.11 13.64* F2.72 3.13
Interaction effect 2429.22 4 607.30 3.57* F4.72 2.51
Within 12239.67 72 170.00 - -
Total 44992.93 80 -
From the above results, we can see that interactions between factors and their main
effects are relevant. That means that all three null hypothesis 7.18–7.20 are
rejected. In Table 7.87 the estimated values are reported.
162 Production Planning in Production Network
Referring to the analysed case, the Tukey test results are reported in Table 7.87.
Using data reported in Table 7.85, Table 7.89 and 7.90 can be built.
G.A. 40.56* 0 0
N.A. 34.17* 6.39 0
100
90
80
70 Centralised
Game Theory
60 Negotiation
50
40
30
0 W
1 B
2 3S 4
100
90
80
70 Centralised
Game Theory
60 Negotiation
50
40
30
0 W
1 2B 3S 4
Finally, given these results with a confidence interval equal to 5%, we can draw the
following conclusions:
the only relevant difference is between the performance estimated using
the centralised model and the two decentralised ones. G.A. and N.A. are
statistically equivalent;
the variability of the input data (Q) significantly influences the response
of the systems, especially passing from W to B and from W to S;
the input data variability and the different used models interact
significantly in the estimation of the performance.
In this analysis, DoE is used to investigate in which way the input variables
influence the absolute residual.
C R
50
45
40
Mean of Absolute Residual
35
30
W B S W B S
Q
50
45
40
35
30
W B S
W B S W B S
C
50
W
B
C 35
S
20
R 50
W
R
B
35
S
20
The absolute residual rapidly diminishes when the capacity ownership of groups
has a small variance. The dependence by the risk attitude of plants is bounded
while, regarding the capacity of plants, the minimum value of the estimated
parameter is reached when the variance is at level B. This trend is also observable
in the interaction plot. The surface responses of the model are reported in Figure
7.52.
166 Production Planning in Production Network
S
B S
R W
C R
90
80
Mean of Absolute Residual
70
W B S W B S
Q
90
80
70
W B S
W B S W B S
100
C
W
B
S 75
C
50
100
R
W
B
S 75
R
50
Wide variance of ownership and capacity of plants leads us to obtain the higher
values of the absolute residual. The diminishing wideness of this data input means
168 Production Planning in Production Network
S
R W
C R
100
90
Mean of Absolute Residual
80
70
W B S W B S
Q
100
90
80
70
W B S
W B S W B S
C 100
W
B
C 75
S
50
R 100
W
R
B
75
S
50
Wide variance of ownership and capacity of plants leads us to obtain higher values
of the absolute residual. Diminishing wideness of this data input means that, in an
approximately linear way, the value of the estimated performance diminishes.
Surface plots are reported in Figure 7.58.
S
R W
8.1 Introduction
In Chapter 5 a hierarchical model for planning production through a distributed
approach in a complex reconfigurable production network has been presented. That
approach is articulated in five hierarchical steps of planning, each one referring to a
specific time horizon and a specific planning objective.
It is also quite evident how each lower level receives input from the upper level
and therefore how a functional integration is needed between each couple of
models. The aim of this chapter is to show how this integration is actually possible
between, at least, two levels of the hierarchical structure presented in Chapter 5.
This will be obtained by carrying out an integrated simulation of two models.
Therefore, the final aim of this chapter is to show how by integrating distributed
production planning approaches is possible to obtain a complete tool for planning
production at different levels of a corporation. The IDEF0 diagram of Figure 8.1
shows the functional integration of the two production planning models at high and
medium levels. As the reader can notice the interdependence between the two
models is represented by the “balanced ownership”, that is, the output of activity
A1. Indeed, as the reader will remember, the aim of A1 is to balance the
ownership, initially located at the Top level, to the groups. As described in Chapter
6 this activity is obtained by bargaining ownership between overloaded and
underloaded groups. Once the balanced ownership is defined, this becomes the
input of the planning at medium level, whose objective is to allocate plants to
groups as described in Chapter 7.
172 Production Planning in Production Networks
Global Ownership
Re-modulated
Groups Ownership
Ownership
3 Months groups High PP Level
demand forecast
A1
Tools to re-modulate
ownership
Medium PP Level
Plants/Groups
Plants A2 allocation matrix
characteristics
As already mentioned, both the high level and medium level focus on the same
time horizon. In this chapter a simulation for the two distributed models, the game-
theoretical and the negotiational one, and for the benchmark, the centralised one, is
carried out. The simulation has been carried out through the agent-based simulation
environment described in the previous chapters. The case study consists of six
groups and 16 plants whose characteristics have been reported in Appendix C.
8.3 Results
Appendix C reports the fixed coefficients used for the simulation and the results
grouped for the 16 different combinations of the input parameters. To better
analyse this results, also in this case, the two-way Analysis of Variance (ANOVA)
and the Design of Experiment (DoE) have been used.
Two factors have been used, i.e. the “kind of model”, whose levels are C.A.
(centralised model), N.A. (negotiation model), G.A. (game-theoretical model) and
the “input parameter” whose levels refer the wideness of the variance range, i.e.
wide (W) and small (S). The “input parameters” are those reported in Table 8.1.
1 2 3 4 5 6 7 8
W 7.928 8.297 7.903 8.332 7.980 8.534 7.454 7.577
C.A.
S 7.984 8.369 8.026 8.470 7.901 8.546 7.474 7.317
W 8.880 8.940 8.974 8.943 9.434 9.418 9.200 9.200
G.A.
S 8.717 8.865 8.967 8.859 9.428 9.298 9.200 9.200
W 7.956 8.460 7.928 8.296 7.928 8.437 7.476 7.546
N.A.
S 7.998 8.248 7.869 8.427 7.950 8.536 7.430 7.318
174 Production Planning in Production Networks
1 2 3 4 5 6 7 8
Cg W W W W S S S S
Qm W W S S W W S S
Rm W S W S W S W S
Table 8.4 reports the mean values of the numbers reported in Table 8.2, while the
last column and row of Table 8.2 report the average of the means.
W S Mean
C.A. 8.00 8.01 8.01
G.A. 9.12 9.07 9.10
N.A. 8.00 7.97 7.99
Mean 8.38 8.35 8.36
Table 8.4 shows that efficiency in the negotiation model is quite similar to the
centralised one, while the game-theoretical one seems to perform worse than the
other two models. This conclusion will be deeply investigated with the two-way
ANOVA. Specifically, there are three sets of hypotheses to be considered. As in
the previous chapters, we consider the null H 0 and the alternative hypothesis
H1 for each set:
for the population means of the factor “kind of model”
° H 0 : PC PN PG
®H : ; (8.1)
°̄ 1 not all Pi^C , N ,G` are equal
for the population means of the factor “workload”:
° H 0 : P W P B PS
®H : ; (8.2)
°̄ 1 not all P j^W , B ,S` are equal
for the interdependencies:
H0 : there is no interaction
® ; (8.3)
¯ H1 : there is interaction
Table 8.5 reports the ANOVA results. Only the main effect relative to the first
factor is significant: therefore, only the first null hypothesis 8.1 is rejected. This
actually means that the model influences the performance parameter efficiency,
while the workload does not. This also means that the difference between the
Distributed Production Planning Models: an Integrated Approach 175
performance of the C.A. and N.A. models and the G.A. one is quite significant, i.e.
the game theoretical model performs worse than the other two, while the
negotiation model performs similarly to the centralised one. Also in this case the T-
test has been carried out; Table 8.6 reports the T-values, and Table 8.7 the
differences.
SS df MS F-test F-crit D 5%
From the analysis of the T-test it is possible to conclude that the estimated
differences among the models are relevant only between C.A. and G.A. and
between G.A. and N.A., but not among the centralised approach and the
negotiational one. Finally, Table 8.8 reports the interaction analysis. It confirms
that the models, combined with the WL input parameter, influence less the
estimated performance.
Table 8.3 where WLg takes the place of Cg. Table 8.10 reports the mean values of
the numbers in Table 8.9.
1 2 3 4 5 6 7 8
W 7.928 8.297 7.903 8.332 7.984 8.369 8.026 8.470
C.A.
S 7.980 8.534 7.454 7.577 7.901 8.546 7.474 7.317
W 8.880 8.940 8.974 8.943 8.717 8.865 8.967 8.859
G.A.
S 9.434 9.418 9.200 9.200 9.428 9.298 9.200 9.200
W 7.956 8.460 7.928 8.296 7.998 8.248 7.869 8.427
N.A.
S 7.928 8.437 7.476 7.546 7.950 8.536 7.430 7.318
W S Mean
C.A. 8.16 7.85 8.01
G.A. 8.89 9.30 9.10
N.A. 8.15 7.83 7.99
Mean 8.40 8.32 8.36
As the reader can notice also in this case the centralised and the negotiational
model perform similarly and better than the game-theoretical one. This conclusion
will be deeply investigated with the ANOVA, whose results are reported in Table
8.11. Also in this case the first null hypothesis can be rejected, leading to
considerations very similar to those of the previous section, i.e. the model
typologies influence the efficiency. In this case, however, also the third null
hypothesis is rejected meaning that some interactions between the two factors are
present. Such interactions can be evaluated observing data from Table 8.12 and
Figures 8.2 and 8.3.
Distributed Production Planning Models: an Integrated Approach 177
SS df MS F-test F-crit D 5%
W S Mean
C.A. 8.04 7.97 8.01
G.A. 9.13 9.06 9.10
N.A. 8.03 7.95 7.99
Mean 8.40 8.32 8.36
10,00
9,50
9,00
Centralised
8,50 Game Theory
Negotiation
8,00
7,50
7,00
W
1 2S
Figure 8.2. Observed values
178 Production Planning in Production Networks
10,00
9,50
9,00
Centralised
8,50 Game Theory
Negotiation
8,00
7,50
7,00
W
1 2S
Figure 8.3. Estimated values
Also in this case a T-test analysis has been carried out and results have been
reported in Tables 8.13–8.14. The T-test analysis confirms the ANOVA results.
Finally, Table 8.15 reports the groups’ interaction analysis whose results support
the previous conclusions.
1 2 3 4 5 6 7 8
W 7.928 8.297 7.980 8.534 7.984 8.369 7.901 8.546
C.A.
S 7.903 8.332 7.454 7.577 8.026 8.470 7.474 7.317
W 8.880 8.940 9.434 9.418 8.717 8.865 9.428 9.298
G.A.
S 8.974 8.943 9.200 9.200 8.967 8.859 9.200 9.200
W 7.956 8.460 7.928 8.437 7.998 8.248 7.950 8.536
N.A.
S 7.928 8.296 7.476 7.546 7.869 8.427 7.430 7.318
Also in this case the two-way ANOVA is carried out, where the null hypotheses
are the same of the previous section. Data for the ANOVA analysis are reported in
Tables 8.17–8.18. The two first null hypotheses are rejected; this means that both
the input factors, model typology and Qm, impact the efficiency means. Again it is
confirmed that the negotiation and centralised approaches perform quite similarly
and somewhat better than the game-theoretical.
W S Mean
C.A. 8.19 7.82 8.01
G.A. 9.12 9.07 9.10
N.A. 8.19 7.79 7.99
Mean 8.50 8.22 8.36
180 Production Planning in Production Networks
SS df MS F-test F-crit D 5%
Column factor W S
S 0.277* 0
T-test analysis, whose results are reported in Tables 8.19–8.21, confirms these
conclusions. Finally, interactions analysis reported in Table 8.22 confirms that
there is not any significant interaction between the two factors.
1 2 3 4 5 6 7 8
W 7.928 7.903 7.980 7.454 7.984 8.026 7.901 7.474
C.A.
S 8.297 8.332 8.534 7.577 8.369 8.470 8.546 7.317
W 8.880 8.974 9.434 9.200 8.717 8.967 9.428 9.200
G.A.
S 8.940 8.943 9.418 9.200 8.865 8.859 9.298 9.200
W 7.956 7.928 7.928 7.476 7.998 7.869 7.950 7.430
N.A.
S 8.460 8.296 8.437 7.546 8.248 8.427 8.536 7.318
W S Mean
C.A. 7.83 8.18 8.01
G.A. 9.10 9.09 9.10
N.A. 7.82 8.16 7.99
Mean 8.25 8.48 8.36
182 Production Planning in Production Networks
SS df MS F-test F-crit D 5%
DoE is used to investigate in which way the input variables influence the estimated
efficiency.
Distributed Production Planning Models: an Integrated Approach 183
WL Cg
8,2
8,1
8,0
Mean of Efficiency
7,9
7,8
S W S W
Q R
8,2
8,1
8,0
7,9
7,8
S W S W
S W S W S W
8,5
WL
S
8,0
WL W
7,5
8,5
Cg
S
8,0
Cg W
7,5
8,5
Q
S
8,0
Q W
7,5
99
Effect Type
Not Significant
95 C Significant
90 B Factor Name
80 A WL
B Cg
70
C Q
Percent
60
50 D R
40
30
20
10 D
5 BC
1
-0,5 -0,4 -0,3 -0,2 -0,1 0,0 0,1 0,2 0,3 0,4
Effect
0,1785
BC Factor Name
C A WL
D B Cg
C Q
B
D R
BCD
CD
AB
Term
BD
ACD
ABCD
ABC
ABD
AD
A
AC
The above results are also confirmed by the surface curves of Figure 8.8.
Concluding, for the centralised model, the efficiency, V, is negatively influenced
by the capacity ownership, Cg, and by the plant capacity, Q, positively by the risk
attitude, R, and by the interaction effects of the Cg and Q variances.
S
R W
WL Cg
8,2
8,1
8,0
7,9
Mean of Efficiency
7,8
L H L H
Q R
8,2
8,1
8,0
7,9
7,8
L H L H
L H L H L H
8,5
WL
L
8,0
WL H
7,5
8,5
Cg
L
8,0
Cg H
7,5
8,5
Q
L
8,0
Q H
7,5
99
Effect Type
Not Significant
95 C Significant
90 B Factor Name
80 BCD A WL
B Cg
70
C Q
Percent
60
50 D R
40
30
20
10 D
5 BC
1
-0,4 -0,3 -0,2 -0,1 0,0 0,1 0,2 0,3 0,4 0,5
Effect
0,1203
C Factor Name
BC A WL
D B Cg
B C Q
BCD D R
CD
ABCD
Term
ABC
BD
A
ACD
AD
AC
AB
ABD
S
R W
WL Cg
9,3
9,2
9,1
9,0
Mean of Efficiency
8,9
S W S W
Q R
9,3
9,2
9,1
9,0
8,9
S W S W
S W S W S W
9,4
WL
9,2 S
WL W
9,0
9,4
Cg
9,2 S
Cg W
9,0
9,4
Q
9,2 S
Q W
9,0
99
Effect Type
Not Significant
95 Significant
90 Factor Name
80 A WL
B Cg
70
C Q
Percent
60
50 D R
40
30
20
10 BC
5 B
1
-0,4 -0,3 -0,2 -0,1 0,0 0,1
Effect
0,0980
B Factor Name
BC A WL
BCD B Cg
A
C Q
D R
C
ABCD
AC
Term
BD
CD
AB
ABD
AD
D
ACD
ABC
This allows us to draw an interesting conclusion about the use of the proposed
models in an integrated way at high and medium level planning. Although the
game-theoretical approach seems to perform a bit worse of the centralised and the
negotiation one, it is the less sensible to the input factors uncertainty.
192 Production Planning in Production Networks
Therefore, when the input factors are known in a quite certain way, the
negotiation approach should be used to plan in a distributed way production at high
and medium level; on the other hand, when input factors uncertainty is high, the
game-theoretical approach should be considered.
S
R W
1 2 3 4 5 6 7 8
W 5.957 6.294 5.937 6.328 6.150 6.540 5.855 6.282
C.A.
S 6.004 6.387 6.075 6.482 6.107 6.498 5.790 5.936
W 6.707 6.677 6.792 6.729 6.897 6.690 6.600 6.600
G.A.
S 6.522 6.711 6.791 6.747 6.818 6.590 6.600 6.600
W 6.033 6.357 5.984 6.353 6.090 6.482 5.790 6.257
N.A.
S 5.957 6.242 5.954 6.492 6.121 6.632 5.831 5.936
Table 8.30 reports the average value of numbers in Table 8.29, while Table
8.31 reports the results of the ANOVA. Tables 8.32 the T-test and Table 8.33 the
interaction analysis. From the analysis of the results it is possible to conclude that
only the null hypothesis 1 can be rejected: i.e. the factor “kind of model” has a
significant impact on the distance performance. Specifically. again the model C.A.
and N.A. seem to perform quite similarly. while the model G.A. performs a bit
worse than the others.
W S Mean
C.A. 6.17 6.16 6.16
G.A. 6.71 6.67 6.69
N.A. 6.17 6.15 6.16
Mean 6.35 6.33 6.34
SS df MS F-test F-crit D 5%
1 2 3 4 5 6 7 8
W 5.957 6.294 5.937 6.328 6.004 6.387 6.075 6.482
C.A.
S 6.150 6.540 5.855 6.282 6.107 6.498 5.790 5.936
W 6.707 6.677 6.792 6.729 6.522 6.711 6.791 6.747
G.A.
S 6.897 6.690 6.600 6.600 6.590 6.600 6.600 6.577
W 6.033 6.357 5.984 6.353 5.957 6.242 5.954 6.492
N.A.
S 6.090 6.482 5.790 6.257 6.121 6.632 5.831 5.936
Distributed Production Planning Models: an Integrated Approach 195
W S Mean
C.A. 6.18 6.14 6.16
G.A. 6.71 6.64 6.68
N.A. 6.17 6.14 6.16
Mean 6.35 6.31 6.33
SS df MS F-test F-crit D 5%
W S Mean
C.A. 6.18 6.14 6.16
G.A. 6.71 6.64 6.68
N.A. 6.17 6.14 6.16
Mean 6.35 6.31 6.33
Column factor W S
S 0.004 0
1 2 3 4 5 6 7 8
W 5,957 6,294 6,150 6,540 6,004 6,387 6,107 6,498
C.A.
S 5,937 6,328 5,855 6,282 6,075 6,482 5,790 5,936
W 6,707 6,677 6,897 6,690 6,522 6,711 6,818 6,590
G.A.
S 6,792 6,729 6,600 6,600 6,791 6,747 6,600 6,600
W 6,033 6,357 6,090 6,482 5,957 6,242 6,121 6,632
N.A.
S 5,984 6,353 5,790 6,257 5,954 6,492 5,831 5,936
Distributed Production Planning Models: an Integrated Approach 197
W S Mean
C.A. 6,24 6,09 6,16
G.A. 6,70 6,68 6,69
N.A. 6,24 6,07 6,16
Mean 6,39 6,28 6,34
SS df MS F-test F-crit D 5%
1 2 3 4 5 6 7 8
W 7.928 7.903 7.980 7.454 7.984 8.026 7.901 7.474
C.A.
S 8.297 8.332 8.534 7.577 8.369 8.470 8.546 7.317
W 8.880 8.974 9.434 9.200 8.717 8.967 9.428 9.200
G.A.
S 8.940 8.943 9.418 9.200 8.865 8.859 9.298 9.200
W 7.956 7.928 7.928 7.476 7.998 7.869 7.950 7.430
N.A.
S 8.460 8.296 8.437 7.546 8.248 8.427 8.536 7.318
W S Mean
C.A. 5.98 6.34 6.16
G.A. 6.72 6.67 6.69
N.A. 5.97 6.34 6.16
Mean 6.22 6.45 6.34
SS df MS F-test F-crit D 5%
W S Mean
C.A. 6.05 6.28 6.16
G.A. 6.58 6.81 6.69
N.A. 6.04 6.27 6.16
Mean 6.22 6.45 6.34
Column factor W S
S 0.228249* 0
6,80
6,70
6,60
6,50
6,40 Centralised
6,30 Game Theory
6,20 Negotiation
6,10
6,00
5,90
5,80
W
1 2S
6,80
6,70
6,60
6,50
6,40 Centralised
6,30 Game Theory
6,20 Negotiation
6,10
6,00
5,90
5,80
1W S
2
Again, DoE is used to investigate in which way the input variables influence the
estimated efficiency.
WL Cg
6,3
6,2
6,1
Mean of Distance
6,0
S W S W
Q R
6,3
6,2
6,1
6,0
S W S W
S W S W S W
6,4 WL
S
6,2
WL W
6,0
6,4 Cg
S
6,2
Cg W
6,0
6,4 Q
S
6,2
Q W
6,0
99
Effect Type
Not Significant
95 C Significant
90 Factor Name
80 A WL
B Cg
70
C Q
Percent
60
D R
50
40
30
20
10 BC
5 D
1
-0,4 -0,3 -0,2 -0,1 0,0 0,1 0,2
Effect
0,1298
D Factor Name
BC A WL
C B Cg
C Q
AB
D R
ABC
ABD
ACD
Term
B
BCD
ABCD
AD
AC
BD
CD
A
S
R W
8.3.4.2 Negotiation
Figure 8.26 reports the main effects, i.e. how input parameter levels influence the
distance performance when using the N.A. model. Again, the workload and
capacity ownership variances have no influence on the performance; on the other
hand, plant production capacity variance negatively influences the efficiency and
the risk attitude variance positively influences the distance parameter. From the
interaction side, Figure 8.27, it seems that the interaction of Q and Cg might have
influence on the distance performance. This is confirmed by the normal probability
plot, Figure 8.28, and by the Pareto chart, Figure 8.29, that puts on evidence how
the risk attitude variance is the most important factor in this case. Finally, Figure
8.30 reports the response curves analysis.
204 Production Planning in Production Networks
WL Cg
6,4
6,3
6,2
6,1
Mean of Distance
6,0
S W S W
Q R
6,4
6,3
6,2
6,1
6,0
S W S W
S W S W S W
6,4 WL
6,2
S
WL
W
6,0
6,4 Cg
6,2
S
Cg
W
6,0
6,4
Q
6,2
S
Q
W
6,0
99
Effect Type
Not Significant
95 C Significant
90 Factor Name
80 A WL
B Cg
70
C Q
Percent
60
50 D R
40
30
20
10 BC
5 D
1
-0,4 -0,3 -0,2 -0,1 0,0 0,1 0,2
Effect
0,0996
D Factor Name
BC A WL
C B Cg
C Q
ABC
D R
ABCD
BCD
ABD
Term
ACD
B
A
AC
AD
BD
CD
AB
S
R W
WL Cg
6,71
6,70
6,69
6,68
Mean of Distance
6,67
S W S W
Q R
6,71
6,70
6,69
6,68
6,67
S W S W
S W S W S W
WL
6,72
S
WL W
6,66
6,60
Cg
6,72
S
Cg W
6,66
6,60
Q
6,72
S
Q W
6,66
6,60
99
Effect Type
Not Significant
95 Significant
90 Factor Name
80 A WL
B Cg
70
C Q
Percent
60
50 D R
40
30
20
10
5 BC
1
-0,15 -0,10 -0,05 0,00 0,05 0,10
Effect
0,1157
BC Factor Name
BCD A WL
BD B Cg
D
C Q
D R
AC
A
B
Term
ABD
ABCD
AD
ACD
CD
C
AB
ABC
S
S S
R W R W
The analysis allows us to draw a conclusion that is quite similar to that drawn for
the efficiency performance. Indeed, also for the distance performance although the
game-theoretical approach, G.A., seems to perform a bit worse of the centralised,
C.A., and the negotiation, N.A., one, it is the last sensitive to the input factor
uncertainty. Therefore, when the input factors are known in a quite certain way, the
negotiation approach should be used to plan in a distributed way production at high
and medium level; on the other hand, when input factors uncertainty is high, the
game-theoretical approach should be used.
combined according to Table 8.3. Table 8.57 reports the average value of numbers
in Table 8.56, while Table 8.58 reports the results of the ANOVA. As the reader
can notice, none of the null hypotheses can be rejected, therefore the T-test analysis
is pointless. None of the input factors, nor their interaction influences the
performance values.
1 2 3 4 5 6 7 8
W 51.761 57.385 42.226 43.216 36.641 36.289 22.450 23.298
C.A.
S 53.674 52.864 46.744 49.030 36.917 37.535 22.347 23.184
W 58.791 59.694 53.668 47.153 38.927 40.474 24.000 25.500
G.A.
S 58.485 58.392 49.213 50.741 40.141 39.182 23.667 24.750
W 53.296 55.043 46.694 47.156 36.947 37.937 22.336 24.037
N.A.
S 50.415 54.864 44.223 45.007 36.096 39.126 23.353 23.168
W S Mean
C.A. 39.16 40.29 39.72
G.A. 43.53 43.07 43.30
N.A. 40.43 39.53 39.98
Mean 41.04 40.96 41.00
SS df MS F–test F–crit D 5%
performance under investigation. Of course, T-test analysis refers in this case to the
second input factor.
1 2 3 4 5 6 7 8
W 51.761 57.385 42.226 43.216 53.674 52.864 46.744 49.030
C.A.
S 36.641 36.289 22.450 23.298 36.917 37.535 22.347 23.184
W 58.791 59.694 53.668 47.153 58.485 58.392 49.213 50.741
G.A.
S 38.927 40.474 24.000 25.500 40.141 39.182 23.667 24.750
W 53.296 55.043 46.694 47.156 50.415 54.864 44.223 45.007
N.A.
S 36.947 37.937 22.336 24.037 36.096 39.126 23.353 23.168
W S Mean
C.A. 49.61 29.83 39.72
G.A. 54.52 32.08 43.30
N.A. 49.59 30.38 39.98
Mean 51.24 30.76 41.00
SS df MS F-test F-crit D 5%
Column factor W S
S 20.476* 0
1 2 3 4 5 6 7 8
W 51.761 57.385 36.641 36.289 53.674 52.864 36.917 37.535
C.A.
S 42.226 43.216 22.450 23.298 46.744 49.030 22.347 23.184
W 58.791 59.694 38.927 40.474 58.485 58.392 40.141 39.182
G.A.
S 53.668 47.153 24.000 25.500 49.213 50.741 23.667 24.750
W 53.296 55.043 36.947 37.937 50.415 54.864 36.096 39.126
N.A.
S 46.694 47.156 22.336 24.037 44.223 45.007 23.353 23.168
W S Mean
C.A. 45.38 34.06 39.72
G.A. 49.26 37.34 43.30
N.A. 45.47 34.50 39.98
Mean 46.70 35.30 41.00
Distributed Production Planning Models: an Integrated Approach 213
SS df MS F-test F-crit D 5%
Column factor W S
S 11.405* 0
1 2 3 4 5 6 7 8
W 51.761 42.226 36.641 22.450 53.674 46.744 36.917 22.347
C.A.
S 57.385 43.216 36.289 23.298 52.864 49.030 37.535 23.184
W 58.791 53.668 38.927 24.000 58.485 49.213 40.141 23.667
G.A.
S 59.694 47.153 40.474 25.500 58.392 50.741 39.182 24.750
W 53.296 46.694 36.947 22.336 50.415 44.223 36.096 23.353
N.A.
S 55.043 47.156 37.937 24.037 54.864 45.007 39.126 23.168
214 Production Planning in Production Networks
W S Mean
C.A. 39.10 40.35 39.72
G.A. 43.36 43.24 43.30
N.A. 39.17 40.79 39.98
Mean 40.54 41.46 41.00
SS df MS F-test F-crit D 5%
WL Cg
50
45
40
Mean of Absolute Residual
35
30
S W S W
Q R
50
45
40
35
30
S W S W
S W S W S W
50 WL
S
40
WL W
30
50 Cg
S
40
Cg W
30
50 Q
S
40
Q W
30
99
Effect Type
Not Significant
95 B Significant
90 C Factor Name
80 A WL
B Cg
70
C Q
Percent
60
50 D R
40
30
20
10
5
1
0 5 10 15 20
Effect
3,25
B Factor Name
C A WL
BC B Cg
ABC C Q
AC
D
A
Term
ABCD
ACD
AB
BD
ABD
AD
BCD
CD
0 5 10 15 20
Effect
S
R W
WL Cg
50
45
40
Mean of Absolute Residual
35
30
S W S W
Q R
50
45
40
35
30
S W S W
L H L H L H
50 WL
L
40
WL H
30
50 Cg
L
40
Cg H
30
50 Q
L
40
Q H
30
99
Effect Type
Not Significant
95 B Significant
90 C Factor Name
80 A WL
B Cg
70
C Q
60
Percent
50
D R
40
30
20
10 D
5 BC
1
0 5 10 15 20
Effect
1,46
B Factor Name
C A WL
BC B Cg
C Q
D
D R
AB
CD
A
Term
ACD
AD
ABD
BCD
BD
AC
ABCD
ABC
0 5 10 15 20
Effect
S
R W
WL Cg
55
50
45
Mean of Absolute Residual
40
35
S W S W
Q R
55
50
45
40
35
S W S W
S W S W S W
WL
50
S
WL W
35
20
Cg
50
S
Cg W
35
20
Q
50
S
Q W
35
20
99
Effect Type
Not Significant
95 B Significant
90 C Factor Name
80 A WL
B Cg
70
C Q
60
Percent
50
D R
40
30
20
10
5 BC
1
0 5 10 15 20 25
Effect
1,91
B Factor Name
C A WL
BC B Cg
C Q
ACD
D R
ABD
BCD
BD
Term
ABCD
AD
CD
A
ABC
AB
D
AC
0 5 10 15 20 25
Effect
S
R W
8.4 Conclusions
This chapter shows the integrated use of the planning models we have discussed in
the previous chapters for planning production at high and medium levels. The aim
of the chapter was to understand what kind of indications could be drawn from an
integrated use of the models.
The main conclusion is that the negotiation model, N.A., performs quite
similarly to the centralised one, C.A., as far as efficiency and distance are
concerned, while the game-theoretical model, G.A., performs a bit worse than the
others.
224 Production Planning in Production Networks
Conclusions
9.1 Summary
This book presents a study that has been conducted about the opportunity to utilise
a set of decentralised models to face the difficulty emerging in the capacity
allocation problem which concerns the semiconductor industry or, more generally,
high-tech, high-volume Industries with a relevant numbers of groups (product
families) and plants geographically dispersed. We modelled the decision problem
using the viewpoints of the managers of the organisation. We first showed that
decentralisation requires the additional restriction of maintaining private
information, which creates unavoidable degradation of overall performance. Under
the private information assumption, we showed that coordination is achievable
between groups’ and plants’ agents using an information exchange scheme. We
proposed two coordination mechanisms using this framework and proved that these
approaches converge to the optimal global solution defined by the centralised
(benchmark) model. From a mathematical standpoint, we modelled the information
exchange as an auction between the competing decision-makers. This approach
reflects the actual opposite agents’ local utility functions and it tries to regulate the
local decisions to match the other side’s needs as closely as possible. The
negotiational and game-theoretical theories provided a flexible analytical
framework to develop this coordination device. Finally, we tested the proposed
mechanisms in an agent-based ad hoc developed discrete-event simulation
environment by using generated numerical data. As far as we know, this research is
one of the very few studies that utilises the application of the game-theory and
negotiational framework to study this kind of issue. It appears that future research
will needed to apply this approach to both optimisation and coordination problems
that can be solved by mathematical-simulative composition.
In what follows, we summarise the main scientific contributions of this book
and some directions for future work.
226 Production Planning in Production Networks
Chapter 8 showed how the system acts when the proposed models work in
an integrated way. This simulation leads us to highlight a statistically
relevant difference between the two decentralised models and between the
centralised and the game-theoretical one, but not between the centralised
and negotiational one. This result leads us to a very important conclusion:
in optimising the capacity allocation and the allocation to the groups of
the production plants the negotiation model acts very well, quite reaching
the same performance obtained in the centralised case. The noticed
differences are only due to the randomness of data input. However, when
the data uncertainty is high, the game-theoretical approach is more robust
in its performance than the negotiational one.
Input
Avg Half Min Max Rep Var Check
parameter levels
WL P C 51.040 2.552 0 343 3541 58.973 5.00%
W W W 39.160 1.958 0 227 2369 37.009 5.00%
W W B 34.098 1.704 0 136 1785 27.957 5.00%
W W S 51.539 2.577 0 354 3645 60.417 5.00%
W B W 34.315 1.715 0 143 1670 27.218 5.00%
W B B 34.649 1.732 0 149 1662 27.421 5.00%
W B S 49.983 2.498 0 340 3725 59.218 5.00%
W S W 38.840 1.942 0 228 2389 36.857 5.00%
W S B 34.475 1.723 0 175 1751 28.006 5.00%
W S S 41.878 2.094 0 409 4621 55.275 5.00%
B W W 27.777 1.389 0 177 3100 30.026 5.00%
B W B 21.694 1.085 0 96 1791 17.826 5.00%
B W S 42.722 2.136 0 344 4529 55.816 5.00%
B B W 28.200 1.410 0 169 3165 30.796 5.00%
B B B 20.659 1.033 0 118 1984 17.863 5.00%
B B S 41.863 2.093 0 355 4703 55.744 5.00%
B S W 26.324 1.316 0 183 3359 29.624 5.00%
B S B 21.485 1.074 0 111 1875 18.062 5.00%
B S S 36.434 1.822 0 361 6000 54.796 5.00%
230 Appendix A
Input parameter
Avg Half Min Max Rep Var Check
levels
WL P C 65.826 3.291 0 368 1937 56.246 5.00%
W W W 43.880 2.193 0 216 1826 36.400 5.00%
W W B 36.765 1.838 0 137 1413 26.826 5.00%
W W S 66.142 3.306 0 357 1875 55.596 5.00%
W B W 43.321 2.165 0 268 1817 35.823 5.00%
W B B 34.803 1.739 0 187 1551 26.604 5.00%
W B S 67.615 3.380 0 352 1913 57.413 5.00%
W S W 44.582 2.228 0 211 1628 34.912 5.00%
W S B 36.657 1.832 0 150 1520 27.732 5.00%
W S S 58.570 2.928 0 340 2330 54.883 5.00%
B W W 31.366 1.568 0 185 2554 30.778 5.00%
B W B 21.999 1.099 0 97 1642 17.301 5.00%
B W S 57.717 2.886 0 412 2361 54.453 5.00%
B B W 30.194 1.509 0 167 2487 29.229 5.00%
B B B 21.926 1.096 0 149 1779 17.952 5.00%
B B S 57.637 2.881 0 357 2382 54.603 5.00%
B S W 30.400 1.519 0 208 2582 29.983 5.00%
B S B 21.064 1.053 0 99 1812 17.403 5.00%
Appendix A 231
Input parameter levels Avg Half Min Max Rep Var Check
WL P C 67.729 3.386 0 383 1838 56.378 5.00%
W W W 43.636 2.181 0 261 1840 36.328 5.00%
W W B 35.612 1.780 0 173 1530 27.038 5.00%
W W S 64.861 3.241 0 338 1951 55.600 5.00%
W B W 35.100 1.754 0 149 1535 26.692 5.00%
W B B 34.894 1.744 0 146 1452 25.811 5.00%
W B S 67.269 3.362 0 387 1898 56.885 5.00%
W S W 43.118 2.155 0 195 1757 35.081 5.00%
W S B 36.148 1.806 0 150 1486 27.035 5.00%
W S S 59.126 2.956 0 433 2125 52.916 5.00%
B W W 31.559 1.578 0 191 2436 30.463 5.00%
B W B 21.575 1.078 0 91 1771 17.621 5.00%
B W S 58.884 2.944 0 357 2346 55.138 5.00%
B B W 31.647 1.582 0 185 2483 30.616 5.00%
B B B 21.730 1.086 0 98 1840 18.092 5.00%
B B S 57.858 2.892 0 367 2251 53.292 5.00%
B S W 30.507 1.525 0 210 2497 29.600 5.00%
B S B 21.739 1.087 0 90 1760 17.708 5.00%
232 Appendix A
p min
g
p max
g
pm* Rc
Input parameter
Avg Half Min Max Rep Var Check
levels
C R Q 14.447 0.127 5.7 23.6 3068 2.725 < 5%
W W W 14.435 0.143 6.4 22.4 1698 2.283 < 5%
W W B 12.180 0.238 6.2 18.6 565 2.194 < 5%
W W S 14.363 0.125 4.1 23.0 3008 2.665 < 5%
W B W 14.435 0.147 7.0 21.8 1552 2.242 < 5%
W B B 12.156 0.224 6.3 19.0 571 2.076 < 5%
W B S 14.430 0.129 5.8 23.1 2903 2.706 < 5%
W S W 14.503 0.144 7.0 21.8 1588 2.235 < 5%
W S B 14.473 0.130 4.7 22.8 2938 2.745 < 5%
W S S 14.670 0.112 4.6 23.9 3908 2.729 < 5%
B W W 14.945 0.128 8.4 22.8 1813 2.121 < 5%
B W B 12.070 0.265 7.3 17.8 370 1.978 < 5%
B W S 14.754 0.111 6.0 24.0 3964 2.713 < 5%
B B W 15.051 0.128 8.6 22.5 1918 2.171 < 5%
B B B 12.030 0.270 7.0 18.1 342 1.937 < 5%
B B S 14.771 0.112 4.1 23.7 3996 2.745 < 5%
B S W 14.946 0.132 6.9 21.9 1670 2.102 < 5%
B S B 12.056 0.289 7.3 19.1 350 2.103 < 5%
B S S 15.161 0.106 4.8 24.0 4743 2.841 < 5%
S W W 15.592 0.121 8.8 22.8 1830 2.015 < 5%
S W B 12.679 0.432 7.8 18.2 149 2.049 < 5%
S W S 15.070 0.102 6.2 24.0 4828 2.760 < 5%
S B W 15.664 0.124 8.9 22.4 1826 2.051 < 5%
Appendix B 235
Input parameter
Avg Half Min Max Rep Var Check
levels
C R Q 11.091 0.101 4.1 18.4 3068 2.167 < 5%
W W W 11.130 0.110 5 18.4 1698 1.764 < 5%
W W B 9.475 0.184 4.4 15.5 565 1.696 < 5%
W W S 11.016 0.100 2.9 18 3008 2.129 < 5%
W B W 11.093 0.111 5 18.2 1552 1.697 < 5%
W B B 9.473 0.178 4.3 15.6 571 1.653 < 5%
W B S 11.043 0.102 3.3 17.7 2903 2.135 < 5%
W S W 11.140 0.113 5.3 17.1 1588 1.745 < 5%
W S B 11.078 0.103 2.4 18.1 2938 2.173 < 5%
W S S 11.296 0.088 2.8 18.6 3908 2.148 < 5%
B W W 11.496 0.100 5.3 17.6 1813 1.654 < 5%
B W B 9.397 0.213 4.9 14.5 370 1.592 < 5%
B W S 11.320 0.089 4.6 18.9 3964 2.180 < 5%
B B W 11.611 0.101 5.9 17.5 1918 1.718 < 5%
B B B 9.354 0.222 4.7 14.4 342 1.591 < 5%
B B S 11.264 0.089 2.3 18.8 3996 2.190 < 5%
B S W 11.545 0.105 5.6 17.8 1670 1.659 < 5%
B S B 9.295 0.226 4.9 13.9 350 1.641 < 5%
B S S 11.669 0.086 3.4 19.2 4743 2.289 < 5%
S W W 11.988 0.096 4.9 18.4 1830 1.603 < 5%
S W B 9.586 0.346 5.4 14.4 149 1.642 < 5%
S W S 11.584 0.081 2.4 18.8 4828 2.192 < 5%
236 Appendix B
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 8.632 0.148 0 22 3068 3.180 < 5%
W W W 8.830 0.189 1 19 1698 3.019 < 5%
W W B 6.681 0.290 1 19 565 2.681 < 5%
W W S 8.575 0.148 0 19 3008 3.150 < 5%
W B W 8.771 0.194 1 19 1552 2.970 < 5%
W B B 6.764 0.289 1 17 571 2.680 < 5%
W B S 8.607 0.149 0 25 2903 3.125 < 5%
W S W 8.738 0.183 1 19 1588 2.837 < 5%
W S B 8.511 0.148 0 19 2938 3.114 < 5%
W S S 8.444 0.139 0 20 3908 3.380 < 5%
B W W 8.574 0.183 1 20 1813 3.023 < 5%
B W B 5.697 0.269 0 16 370 2.757 < 5%
B W S 8.483 0.137 0 22 3964 3.357 < 5%
B B W 8.619 0.178 0 20 1918 3.030 < 5%
B B B 5.883 0.259 0 18 342 2.576 < 5%
B B S 8.511 0.139 0 20 3996 3.401 < 5%
B S W 8.646 0.188 0 20 1670 2.985 < 5%
B S B 5.666 0.175 0 15 350 2.724 < 5%
B S S 8.357 0.151 0 23 4743 4.029 < 5%
S W W 8.721 0.213 0 20 1830 3.531 < 5%
S W B 4.530 0.052 0 15 149 2.481 < 5%
Appendix B 237
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 52.838 1.788 0 291 3068 38.459 < 5%
W W W 46.064 1.967 0 215 1698 31.479 < 5%
W W B 54.876 2.437 8 170 565 22.500 < 5%
W W S 53.339 1.810 1 276 3008 38.541 < 5%
W B W 45.952 1.962 0 173 1552 30.020 < 5%
W B B 56.807 2.581 12 185 571 23.949 < 5%
W B S 53.358 1.802 0 279 2903 37.706 < 5%
W S W 46.858 2.000 0 216 1588 30.946 < 5%
W S B 54.362 1.869 1 301 2938 39.337 < 5%
W S S 43.519 1.372 1 332 3908 33.309 < 5%
B W W 33.201 1.420 0 161 1813 23.475 < 5%
B W B 44.257 2.015 13 110 370 15.054 < 5%
B W S 42.485 1.319 1 270 3964 32.239 < 5%
B B W 32.359 1.374 0 255 1918 23.362 < 5%
B B B 43.912 1.995 15 89 342 14.326 < 5%
B B S 43.392 1.370 0 249 3996 33.642 < 5%
B S W 32.646 1.393 1 134 1670 22.109 < 5%
B S B 44.517 2.011 16 94 350 14.613 < 5%
B S S 31.641 1.180 0 250 4743 31.562 < 5%
S W W 19.685 0.961 0 108 1830 15.963 < 5%
238 Appendix B
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 15.600 0.124 9.1 21.5 2001 2.149 < 5%
W W W 15.738 0.145 7.9 21.1 1330 2.054 < 5%
W W B 15.954 0.153 9.8 21.5 1102 1.971 < 5%
W W S 15.638 0.130 7.6 22.3 2001 2.253 < 5%
W B W 15.697 0.136 8.9 21.1 1358 1.942 < 5%
W B B 15.710 0.151 8.7 21.1 1107 1.954 < 5%
W B S 15.677 0.131 6.7 22.1 2001 2.283 < 5%
W S W 15.599 0.147 8.6 22.0 1315 2.073 < 5%
W S B 16.504 0.136 9.1 23.4 2001 2.367 < 5%
W S S 15.901 0.120 8.1 22.1 2001 2.087 < 5%
B W W 16.020 0.121 10.9 21.6 1456 1.788 < 5%
B W B 15.864 0.140 9.9 20.9 1048 1.757 < 5%
B W S 15.542 0.115 8.5 21.4 2001 1.996 < 5%
B B W 15.621 0.121 10.0 21.5 1368 1.744 < 5%
B B B 15.617 0.128 10.2 20.9 1147 1.684 < 5%
B B S 16.931 0.125 7.8 22.6 2001 2.179 < 5%
B S W 17.319 0.135 9.9 22.8 1335 1.910 < 5%
B S B 17.093 0.150 11.4 22.7 1000 1.848 < 5%
B S S 15.910 0.113 8.8 22.3 2001 1.960 < 5%
Appendix B 239
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 12.150 0.095 5.8 17.1 2001 1.652 < 5%
W W W 12.222 0.106 6.2 16.8 1330 1.507 < 5%
W W B 12.304 0.117 7.1 17 1102 1.505 < 5%
W W S 12.187 0.096 5.8 17.1 2001 1.667 < 5%
W B W 12.251 0.104 6.9 16.5 1358 1.483 < 5%
W B B 12.182 0.114 7.6 17.3 1107 1.476 < 5%
W B S 12.191 0.097 5.2 17.5 2001 1.681 < 5%
W S W 12.072 0.110 5.6 17.4 1315 1.553 < 5%
W S B 13.077 0.101 6.9 18.7 2001 1.746 < 5%
W S S 12.374 0.090 5.4 17.7 2001 1.568 < 5%
B W W 12.482 0.088 7.8 16.7 1456 1.303 < 5%
B W B 12.472 0.099 7.5 16.1 1048 1.240 < 5%
B W S 12.183 0.088 6.4 16.8 2001 1.524 < 5%
B B W 12.240 0.088 6.9 16.6 1368 1.262 < 5%
B B B 12.349 0.099 7.4 16.5 1147 1.300 < 5%
B B S 13.393 0.091 7 18.7 2001 1.589 < 5%
B S W 13.594 0.098 8.1 18 1335 1.391 < 5%
B S B 13.544 0.112 8.3 18.3 1000 1.372 < 5%
240 Appendix B
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 8.392 0.166 0 22 2001 2.889 < 5%
W W W 8.521 0.195 2 19 1330 2.755 < 5%
W W B 8.624 0.218 1 19 1102 2.812 < 5%
W W S 7.290 0.162 0 23 2001 2.813 < 5%
W B W 7.557 0.191 1 19 1358 2.740 < 5%
W B B 7.371 0.204 0 16 1107 2.640 < 5%
W B S 7.508 0.163 0 19 2001 2.825 < 5%
W S W 7.290 0.187 0 20 1315 2.628 < 5%
W S B 6.041 0.155 0 17 2001 2.689 < 5%
W S S 7.224 0.149 1 16 2001 2.584 < 5%
B W W 7.350 0.171 0 18 1456 2.537 < 5%
B W B 7.163 0.190 0 14 1048 2.391 < 5%
B W S 6.000 0.139 0 16 2001 2.414 < 5%
B B W 5.966 0.154 1 16 1368 2.210 < 5%
B B B 6.085 0.168 0 14 1147 2.214 < 5%
B B S 4.600 0.125 0 12 2001 2.163 < 5%
B S W 4.352 0.142 0 13 1335 2.016 < 5%
Appendix B 241
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 99.455 1.930 17 285 2001 33.534 < 5%
W W W 78.208 1.915 18 224 1330 27.127 < 5%
W W B 72.400 1.876 23 154 1102 24.189 < 5%
W W S 99.618 1.911 16 266 2001 33.194 < 5%
W B W 79.564 1.960 15 214 1358 28.053 < 5%
W B B 73.294 1.940 20 170 1107 25.064 < 5%
W B S 100.044 1.970 25 282 2001 34.220 < 5%
W S W 79.071 1.917 27 200 1315 27.003 < 5%
W S B 100.966 1.946 28 301 2001 33.806 < 5%
W S S 90.706 1.662 31 262 2001 28.873 < 5%
B W W 66.760 1.299 25 171 1456 19.246 < 5%
B W B 60.804 1.328 21 130 1048 16.700 < 5%
B W S 90.959 1.642 27 224 2001 28.520 < 5%
B B W 67.991 1.366 17 160 1368 19.617 < 5%
B B B 60.643 1.260 23 121 1147 16.569 < 5%
B B S 91.443 1.630 27 222 2001 28.320 < 5%
B S W 69.216 1.384 24 177 1335 19.645 < 5%
242 Appendix B
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 17.336 0.135 8.6 23.9 1973 2.321 < 5%
W W W 17.556 0.148 10.4 23.7 1307 2.079 < 5%
W W B 17.721 0.166 11.4 23.2 1018 2.061 < 5%
W W S 17.351 0.137 9.4 23.5 1933 2.341 < 5%
W B W 17.578 0.149 11.8 23.8 1242 2.037 < 5%
W B B 17.675 0.157 11.1 23.5 1071 1.997 < 5%
W B S 17.342 0.129 8 24.1 2104 2.305 < 5%
W S W 17.585 0.150 11.3 23.7 1284 2.081 < 5%
W S B 17.310 0.142 7.3 24.4 1921 2.413 < 5%
W S S 17.639 0.121 7.9 24.2 2341 2.277 < 5%
B W W 17.846 0.134 10.7 23 1334 1.907 < 5%
B W B 18.038 0.160 11.3 23.6 962 1.925 < 5%
B W S 17.594 0.122 8.4 23.6 2426 2.326 < 5%
B B W 17.955 0.132 10.6 24 1405 1.915 < 5%
B B B 17.891 0.153 12.1 23.6 948 1.834 < 5%
B B S 17.484 0.122 7.2 23.6 2409 2.331 < 5%
B S W 17.959 0.138 11.8 23.7 1294 1.931 < 5%
Appendix B 243
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 13.229 0.108 6.7 19 1973 1.862 < 5%
W W W 13.357 0.112 8.3 18.9 1307 1.571 < 5%
W W B 13.471 0.124 8.1 18.6 1018 1.537 < 5%
W W S 13.237 0.104 5.8 19 1933 1.783 < 5%
W B W 13.517 0.116 8.3 18.6 1242 1.588 < 5%
W B B 13.613 0.120 8.6 19 1071 1.525 < 5%
W B S 13.229 0.104 5.3 18.8 2104 1.848 < 5%
W S W 13.401 0.116 6.4 17.9 1284 1.614 < 5%
W S B 13.257 0.111 5.1 19 1921 1.891 < 5%
W S S 13.518 0.093 5.3 18.7 2341 1.745 < 5%
B W W 13.578 0.098 8 17.8 1334 1.386 < 5%
B W B 13.592 0.111 10 17.6 962 1.341 < 5%
B W S 13.412 0.094 6.2 18.8 2426 1.795 < 5%
B B W 13.654 0.101 8.9 17.8 1405 1.472 < 5%
B B B 13.695 0.111 9.2 17.9 948 1.323 < 5%
B B S 13.327 0.092 5.3 18.3 2409 1.761 < 5%
B S W 13.620 0.099 9.4 17.4 1294 1.384 < 5%
244 Appendix B
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 7.313 0.170 0 18 1973 2.933 < 5%
W W W 7.301 0.213 0 17 1307 2.997 < 5%
W W B 7.059 0.225 0 16 1018 2.792 < 5%
W W S 7.305 0.172 0 16 1933 2.935 < 5%
W B W 7.173 0.206 0 19 1242 2.814 < 5%
W B B 7.049 0.229 0 16 1071 2.905 < 5%
W B S 7.306 0.165 0 17 2104 2.937 < 5%
W S W 7.114 0.206 0 21 1284 2.862 < 5%
W S B 7.349 0.172 0 18 1921 2.928 < 5%
W S S 6.090 0.154 0 19 2341 2.897 < 5%
B W W 5.473 0.187 0 15 1334 2.648 < 5%
B W B 5.201 0.216 0 14 962 2.604 < 5%
B W S 6.019 0.152 0 18 2426 2.907 < 5%
B B W 5.506 0.185 0 16 1405 2.692 < 5%
B B B 5.412 0.225 0 16 948 2.695 < 5%
B B S 6.078 0.155 0 18 2409 2.947 < 5%
B S W 5.389 0.190 0 15 1294 2.653 < 5%
Appendix B 245
Input parameter levels Avg Half Min Max Rep Var Check
C R Q 86.182 1.974 29 185 1018 33.084 < 5%
W W W 93.291 2.012 26 219 1307 28.247 < 5%
W W B 86.182 1.974 29 185 1018 24.458 < 5%
W W S 116.245 2.039 42 302 1933 34.808 < 5%
W B W 92.717 2.009 26 203 1242 27.502 < 5%
W B B 86.317 2.001 31 204 1071 25.425 < 5%
W B S 114.494 1.937 38 260 2104 34.506 < 5%
W S W 93.139 2.024 30 211 1284 28.170 < 5%
W S B 115.081 2.005 30 295 1921 34.134 < 5%
W S S 97.415 1.633 28 252 2341 30.692 < 5%
B W W 71.642 1.434 22 158 1334 20.343 < 5%
B W B 64.127 1.397 25 140 962 16.822 < 5%
B W S 96.167 1.538 30 251 2426 29.415 < 5%
B B W 71.421 1.341 30 179 1405 19.514 < 5%
B B B 64.395 1.396 20 123 948 16.690 < 5%
B B S 96.281 1.552 28 240 2409 29.581 < 5%
B S W 71.702 1.382 22 156 1294 19.307 < 5%
246 Appendix B
p min
g
p maxg
pm* Rc
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WLg Cg Qm Rm
Input parameter levels Avg Half Min Max Rep Var Check
WL g Cg Qm Rm