WMU Home

Financial Simulator for Multi-Period Production



Product: Financial Simulator for Multi-Period Production

Development Stage: Proof of Concept Completed

Primary Inventors: David Meade, PhD, Manufacturing Engineering Department

Scientific Publication: Meade & Kumar, 2006, Transactions of the NAMRI/SME, 34, 477-484

License Status: License Available

Patent Status: US: 2011/0246257; Canada: 2,560,403

Reference: 2006-006

Contact: Clark Bennett PhD
dclark.bennett@wmich.edu
269-387-8218

Download PDF



     To facilitate the planning necessary for a successful manufacturing business, many manufacturers utilize a business planning technique known as Material Requirements Planning (MRP). A MRP system analyzes manufacturing inputs and outputs to facilitate day-to-day operations by generating production schedules, and materials and parts inventory requirements.
     Unlike MRP, Discrete Event Simulators (DES) analyze the actual manufacturing process, by simulating the behavior of the series of process steps. DES systems assess manufacturing capacity, single manufacturing cycle process effectiveness and alternative approaches for process improvement. They provide no insight on how process changes affect the financials of the business, and their output is the result of a single simulation of the process.

Technology Description
     Dr. David Meade at Western Michigan University has developed a computer-based Multi-Period Financial Simulator program that predicts the financial impact of a manufacturing process by utilizing a discrete event simulator (DES) in communication with a financial forecasting system (FFS).  The DES simulates the manufacturing process and communicates updated operational output to the FFS. The FFS updates the corresponding financial information for the operational output.
     This program produces manufacturing efficiency results, inventory tracking, a production schedule, monthly sales and month end profits and losses. The DES can then repeat the process simulation, based on the updated operational and financial output from the first simulation and the FFS updates its original financial output based on the second DES simulation output. The program can be directed to repeat the simulations multiple times, using the updated outputs from each simulation round, analyzing multiple manufacturing runs or time periods (days, weeks or months). This is valuable because the user can also specify changes to input parameters during the specified time period, determining the financial impact of different manufacturing scenarios. An example of this would be changing product and/or raw material inventories over the specified period, mimicking inventory build-ups and draw-downs.
     In addition, the program can determine a statistical confidence interval/ level for the output results. Alternatively, it can continuously replicate the simulations until a desired confidence level is obtained.

Potential Benefits
  • Financial & efficiency results from simulation of a manufacturing process
  • Results derived from multiple process runs or time periods
  • Changing input parameters analyzed during multiple runs
  • Confidence levels determined for simulation results.

Financial Simulator for Multi-Period Production


     To facilitate the planning necessary for a successful manufacturing business, many manufacturers utilize a business planning technique known as Material Requirements Planning (MRP). A MRP system analyzes manufacturing inputs and outputs to facilitate day-to-day operations by generating production schedules, and materials and parts inventory requirements.
     Unlike MRP, Discrete Event Simulators (DES) analyze the actual manufacturing process, by simulating the behavior of the series of process steps. DES systems assess manufacturing capacity, single manufacturing cycle process effectiveness and alternative approaches for process improvement. They provide no insight on how process changes affect the financials of the business, and their output is the result of a single simulation of the process.

Technology Description
     Dr. David Meade at Western Michigan University has developed a computer-based Multi-Period Financial Simulator program that predicts the financial impact of a manufacturing process by utilizing a discrete event simulator (DES) in communication with a financial forecasting system (FFS).  The DES simulates the manufacturing process and communicates updated operational output to the FFS. The FFS updates the corresponding financial information for the operational output.
     This program produces manufacturing efficiency results, inventory tracking, a production schedule, monthly sales and month end profits and losses. The DES can then repeat the process simulation, based on the updated operational and financial output from the first simulation and the FFS updates its original financial output based on the second DES simulation output. The program can be directed to repeat the simulations multiple times, using the updated outputs from each simulation round, analyzing multiple manufacturing runs or time periods (days, weeks or months). This is valuable because the user can also specify changes to input parameters during the specified time period, determining the financial impact of different manufacturing scenarios. An example of this would be changing product and/or raw material inventories over the specified period, mimicking inventory build-ups and draw-downs.
     In addition, the program can determine a statistical confidence interval/ level for the output results. Alternatively, it can continuously replicate the simulations until a desired confidence level is obtained.

Potential Benefits
  • Financial & efficiency results from simulation of a manufacturing process
  • Results derived from multiple process runs or time periods
  • Changing input parameters analyzed during multiple runs
  • Confidence levels determined for simulation results.

Product: Financial Simulator for Multi-Period Production

Development Stage: Proof of Concept Completed

Primary Inventors: David Meade, PhD, Manufacturing Engineering Department

Scientific Publication: Meade & Kumar, 2006, Transactions of the NAMRI/SME, 34, 477-484

License Status: License Available

Patent Status: US: 2011/0246257; Canada: 2,560,403

Reference: 2006-006

Contact: Clark Bennett PhD
dclark.bennett@wmich.edu
269-387-8218

Download PDF