 Flexible lot sizing in hybrid make-to-order/make-to-stock production planningBart Beemsterboer, Martin Land and Ruud Teunter European Journal of Operational Research, 2017, vol. 260, issue 3, 1014-1023 Abstract: Hybrid make-to-order/make-to-stock production systems are difficult to control. Batch production of make-to-stock products allows for efficient capacity usage, but fixed batch sizes can make the system less responsive to make-to-order customers. Using Markov Decision Process modeling, we show that the optimal policy for such hybrid systems varies the lot size in response to make-to-order backlogs as well as stock levels. We evaluate the performance of this flexible lot sizing policy for a two-product hybrid system. We find that it leads to savings of up to 23% compared to policies that use either completely or partly fixed lot sizes. We also find that flexible lot sizing is especially beneficial for systems with a low load and where make-to-stock is important in terms of production capacity usage and cost. Keywords: Production; Production planning; Lot sizing; Hybrid production; Markov Decision Process (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:260:y:2017:i:3:p:1014-1023 DOI: 10.1016/j.ejor.2017.01.015 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 |
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