A Single Bottleneck System with Binomial Yields and Rigid Demand

Abraham Grosfeld-Nir and Boaz Ronen
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Abraham Grosfeld-Nir: Department of Management Sciences, University of Waterloo, Waterloo, Ontario, Canada N2L 3G1
Boaz Ronen: Faculty of Management, The Leon Recanati Graduate School of Business Administration, Tel Aviv University, P.O. Box 39010, Ramat Aviv, Tel Aviv, 69978, Israel

Management Science, 1993, vol. 39, issue 5, 650-653

Abstract: This paper considers a "single bottleneck system": a multistage production system where all setups except one are zero. The stage with nonzero setup is defined to be the bottleneck; it may be thought of as the critical resource whose throughput largely determines the throughput of the entire system, as a envisioned by the OPT philosophy. Production is in lots with uncertain (binomial) yields and demand needs to be satisfied in full, thus possibly necessitating multiple production runs. We show how the optimal control problem can be reduced to that of optimal lotsizing a single stage.

Keywords: random yield; binomial distribution; rigid demand; bottleneck (search for similar items in EconPapers)
Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:39:y:1993:i:5:p:650-653

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