Optimal Composition of Number and Size of Machines

Klaus Altendorfer
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Klaus Altendorfer: University of Applied Sciences Upper Austria

Chapter Chapter 5 in Capacity and Inventory Planning for Make-to-Order Production Systems, 2014, pp 73-98 from Springer

Abstract: Abstract An important trade-off in manufacturing capacity planning is between the number and size of machines, i.e. a few large versus a larger number of small machines. The complexity of such a tactical decision further increases in a multi-stage system and costs for investments need to be further traded-off with inventory and backorder costs whereby investment decisions need to correctly anticipate operational replenishment and workload control decisions. Therefore the influence of a predefined set of processing rates on the optimal capacity investment is investigated in an MTO production system with stochastic due dates, a WAW work release policy, as well as FGI and backorder costs. The question of which technology option to take and how much machines to invest for minimizing overall costs in such a system is one continuously faced by production managers and therefore of practical relevance.

Keywords: Processing Rate; Lead Time; Test Instance; Customer Order; Capacity Cost (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-319-00843-1_5

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DOI: 10.1007/978-3-319-00843-1_5

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