A comparative study of rough-cut cost estimations in a finite-capacity stochastic environment

Mark Eklin, Avraham Shtub and Yohanan Arzi

International Journal of Revenue Management, 2009, vol. 3, issue 1, 1-36

Abstract: In recent years, several researchers suggested cost estimation models that consider the limited capacity of the shop. In these studies, the stochastic nature of the shop floor is modelled by a time-consuming simulation. This article compares five alternative rough-cut cost estimation methods that can replace the simulation. The study compares the cost estimations derived from these methods. A cost estimation method, based on the forced idle time of the bottleneck workstation, was found to be outperform the others. As the best method, the bottleneck-based method was compared to the actual order's cost and was found to be a replacement to simulation.

Keywords: aggregate planning; rough-cut cost estimation; finite capacity; job shop scheduling; revenue management; stochastic environment; forced idle time; bottleneck workstations. (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijrevm:v:3:y:2009:i:1:p:1-36

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