Material Requirements Planning under Phase-out Conditions

In today's production environment with shortened product lifecycles, phase-outs, i.e. product elimination from production, become regular events. Badly planned phase-outs lead to high remaining stock levels after end of production, causing immense sunk costs. Previously performed 26 interviews revealed that this is a major challenge in current production (Grussenmeyer and Blecker, 2014; Grussenmeyer, Gencay and Blecker, 2014). Therefore, the objective of this paper is to develop a material requirements planning focusing on remaining stock induced costs during phase-out to plan optimal phase-out quantity and phase-out date. The research is conceptually driven and proposes an example of the methodology.