Hybrid MTO-MTS production planning: An explorative study

Bart Beemsterboer, Martin Land and Ruud Teunter

European Journal of Operational Research, 2016, vol. 248, issue 2, 453-461

Abstract: Research on the planning and control of combined make-to-order/make-to-stock or hybrid production systems often takes a typical MTO or MTS perspective. We examine the benefits of a hybrid planning approach without priority for either MTO or MTS. We develop a Markov Decision Process model for a two-product hybrid system to determine when to manufacture MTS and MTO products. Contrary to earlier studies with this approach, this study includes a positive lead time for MTO products. We characterize optimal policies and show how decisions should be based on both inventory level and backlog state of MTO products. Especially discriminating between states with and states without backlog of MTO orders is shown to be important in determining whether to increase MTS stock. Savings of up to 65 percent are achieved compared to policies that prioritize MTS or MTO.

Keywords: Production; Planning; Hybrid production; MTO-MTS production; Markov Decision Process (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221715006712
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:248:y:2016:i:2:p:453-461

DOI: 10.1016/j.ejor.2015.07.037

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().