Production control under uncertainty: Closed-loop versus open-loop approach

Konstantin Kogan

IISE Transactions, 2009, vol. 41, issue 10, 905-915

Abstract: A basic production system facing two types of uncertainty (shocks), multiplicative and additive, is considered. The former is due to a stochastic yield; the other to a stochastic demand. The objective of the production system is to choose a production rate (control) that minimizes expected inventory and production costs. Stochastic production control is typically considered the prerogative of closed-loop or on-line approaches. However, in certain manufacturing systems, information about inventory levels may at best be imprecise. Moreover, the production rate cannot be instantaneously adjusted in response to inventory updates. This warrants the exploration of an open-loop or off-line control methodology. In the comparative analysis of the two approaches presented in this paper, the probability distribution of inventories is characterized, the damage associated with the inability to adjust production is assessed, and the conditions at when the gap between the two approaches are insignificant are highlighted.[Supplementary materials are available for this article. Go to the publisher's online edition of IIE Transactions for the following free supplemental resource: Appendix]

Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/07408170902973944 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:uiiexx:v:41:y:2009:i:10:p:905-915

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/uiie20

DOI: 10.1080/07408170902973944

Access Statistics for this article

IISE Transactions is currently edited by Jianjun Shi

More articles in IISE Transactions from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().