Variance Effects in Cyclic Production Systems

Debashish Sarkar and Willard I. Zangwill
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Debashish Sarkar: AT&T Bell Laboratories, Room 3K332, Crawfords Corner Road, Holmdel, New Jersey 07733-1988
Willard I. Zangwill: Graduate School of Business, University of Chicago, 1101 East 58th Street, Chicago, Illinois 60637

Management Science, 1991, vol. 37, issue 4, 444-453

Abstract: Utilizing a cyclic queue system, this paper investigates the effect of variance on a multi-item production facility. The variance of setup time, service rate and arrival rate is shown to have a powerful and sometimes paradoxical influence. Reduction in setup time, for example, is usually presumed to reduce inventory. We demonstrate that inventory can blow up if setup time is cut. Another paradoxical effect of variance is on processing rate. Speeding up the processing rate should reduce the material waiting to be processed. Again we show that the opposite can hold. Other properties of variance are examined, such as its relationship to KAIZEN and Just-In-Time production practices, and especially its property of impairing capacity.

Keywords: inventory: stochastic multiproduct systems; variance effects; production: cyclic; multiproduct; paradoxes; variability; capacity; throughput; variance reduction; queues: cyclic (search for similar items in EconPapers)
Date: 1991
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:37:y:1991:i:4:p:444-453

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