A two-bottleneck system with binomial yields and rigid demand

A two-bottleneck system with binomial yields and rigid demand

0.00 Avg rating0 Votes
Article ID: iaor20061637
Country: Netherlands
Volume: 165
Issue: 1
Start Page Number: 231
End Page Number: 250
Publication Date: Aug 2005
Journal: European Journal of Operational Research
Authors:
Keywords: inventory
Abstract:

This study considers multistage production systems where production is in lots and only two stages have non-zero setup costs. Yields are binomial and demand, needing to be satisfied in its entirety, is “rigid”. We refer to a stage with non-zero setup cost as a “bottleneck” (BN) and thus to the system as “a two-bottleneck system” (2-BNS). A close examination of the simplest 2-BNS reveals that costs corresponding to a particular level of work in process (WIP) depend upon costs for higher levels of WIP, making it impossible to formulate a recursive solution. For each possible configuration of intermediate inventories a production policy must specify at which stage to produce next and the number of units to be processed. We prove that any arbitrarily “fixed” production policy gives rise to a finite set of linear equations, and develop algorithms to solve the two-stage problem. We also show how the general 2-BNS can be reduced to a three-stage problem, where the middle stage is a non-BN, and that the algorithms developed can be modified to solve this problem.

Reviews

Required fields are marked *. Your email address will not be published.