Multistage production systems with random yields and rigid demand

Tal Ben-Zvi and Abraham Grosfeld-Nir

International Journal of Manufacturing Technology and Management, 2010, vol. 20, issue 1/2/3/4, 286-299

Abstract: The increased complexity of contemporary manufacturing makes it hard to maintain a predictable level of output. We consider several types of multistage systems in an environment where yield is random, production is in lots and demand needs to be satisfied in its entirety. For each possible configuration of intermediate inventories a production policy must specify the stage at which to produce next and the lot size to be processed. The objective is to minimise the expected total of setup and variable production costs. We show that the expected cost associated with any arbitrary production policy can be calculated by solving a finite set of linear equations. The result is general in that it applies to any yield structure. We also develop efficient heuristics to solve various multistage systems. Selected numerical results are presented for binomial yields.

Keywords: multiple lot sizing; random yields; rigid demand; multistage production systems; arbitrary production policy. (search for similar items in EconPapers)
Date: 2010
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