Assessing the benefits of different stock-allocation policies for a make-to-stock production system

Assessing the benefits of different stock-allocation policies for a make-to-stock production system

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Article ID: iaor20022126
Country: United States
Volume: 13
Issue: 2
Start Page Number: 105
End Page Number: 121
Publication Date: Mar 2001
Journal: Manufacturing & Service Operations Management
Authors: , ,
Keywords: make-to-stock
Abstract:

We consider a manufacturing facility that produces a single item that is demanded by several different classes of customers. The inventory-related cost performance of such a system can be improved by effective allocation of production and inventories. We obtain the optimal parameters for three easily implementable allocation policies. Our results cover the case of linear backorder costs as well as fill-rate constraints. We compare the optimal performance of these control policies to gain insights into the benefits of different production and stock-allocation rules.

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