Linear programming aggregation: A heuristic for hierarchical production planning

We present an aggregation/disaggregation approach to hierarchical production planning. We start off with a disaggregate mixed-integer linear programming model which follows a monolithic approach. Based on this disaggregate model we use the theory of aggregation in mathematical programming to derive an aggregate production planning model. Through an iterative aggregation/disaggregation procedure we derive models which could be interpreted as planning models in a hierarchical production planning approach. We point out the similarities and differences between our approach and the approach given by Graves (1982).