Application of load-oriented manufacturing control in industry

This paper deals with multi-stage lotsizing models for imperfect production processes. The effect of imperfect quality on lotsizing decisions and effect ofinspection errorsare taken into consideration in the proposed models. Numerical examples are presented for illustration purposes. The developed models are very helpful for justifying quality assurance and quality improvement efforts.     

The effects of learning and forgetting on the optimal lot size quantity of intermittent production runs

This paper studies the effects of learning and forgetting on the production lot size problem with infinite and finite planning horizons. It is assumed that the determination of the economic manufactured quantity (EMQ) in the succeeding production run is dependent on: (1) the maximum inventory accumulated prior to interruption; (2) the length of the interruption period which incurs total forgetting; and (3) the level of experience in equivalent units remembered at the start-up of the next production run. The optimum operating inventory doctrines is obtained by trading off procurement cost per unit time and the inventory carrying cost per unit time, so that their sum will be a minimum. A numerical example is presented to demonstrate the application of learning and forgetting to the determination of the EMQ.     

Economic Production Lot Sizing with Periodic Costs and Overtime*

Traditional approaches for modeling economic production lot‐sizing problems assume that a single, fixed equipment setup cost is incurred each time a product is run, regardless of the quantity manufactured. This permits multiple days of production from one production setup. In this paper, we extend the model to consider additional fixed charges, such as cleanup or inspection costs, that are associated with each time period's production. This manufacturing cost structure is common in the food, chemical, and pharmaceutical industries, where process equipment must be sanitized between item changeovers and at the end of each day's production. We propose two mathematical problem formulations and optimization algorithms. The models' unique features include regular time production constraints, a fixed charge for each time period's production, and the availability of overtime production capacity. Experimental results indicate the conditions under which our algorithms' performance is superior to traditional approaches. We also test the procedures on a set of lot‐sizing problems facing a national food processor and document their potential economic benefit.     

The Production of Several Items in a Single Facility with Linearly Changing Demand Rates

In this paper we extend the ELSP model to allow for linearly changing demand rates over a fixed planning horizon. This extension of the ELSP research provides a model that can be used in coordinating the production and marketing planning activities in a firm. The model allows the user to evaluate the impact of changes in product demand on production costs and customer service. We solve the model using a standard nonlinear programming package (MINOS) and show through examples based on actual production data how the model can be used to support coordinated production and marketing planning.     

An Empirical Investigation of Costs in Batching Decisions*

This paper examines the use of costs and cost functions to model lot‐sizing decisions in batch manufacturing. The cost functions used to model a wide variety of manufacturing systems are typically derived from average cost models of unconstrained inventory problems. The use of setups and average inventories as the basis for modeling the economics of a typical batch manufacturing cell is shown to be inadequate. An alternative physical model that focuses on lead times provides a model that more closely represents the underlying value of such a cell.     

Optimal Policy for a Reseller When the Supplier Offers a Temporary Reduction in Price*

A common practice in product distribution is the case in which the supplier offers a temporary reduction in price. It is suggested in the literature that in such situations, the reseller may engage in forward buying (i.e., purchasing additional stock at the reduced price offered by the supplier for later sale at the regular selling price). In this paper, a model is formulated of the reseller's response when the supplier offers a temporary reduction in price. It is assumed that the market demand for the product is elastic with respect to the selling price the reseller sets. A procedure for determining the optimal response of the reseller is developed. The model presented in this paper can easily be adapted to the case in which the reseller faces a permanent increase in the price charged by the supplier.     

RFID as an Enabler of Improved Manufacturing Performance*

The use of radio frequency identification (RFID) versus bar coding has been debated with little quantitative research about how to best use RFID's capabilities and when RFID is more advantageous. This article responds to that need by qualitatively and quantitatively analyzing how RFID facilitates increased traceability and control in manufacturing, which in turn enables the use of more lot splitting and smaller lot sizes. We develop insights about operating policies (RFID vs. bar‐code tracking mechanisms, extent of lot splitting, and dispatching rules) and an operating condition (setup to processing time ratio) that affect the mean flow time and proportion of jobs tardy in a job shop. A simulation model is used to control factors in the experimental design and the output is evaluated using analysis of variance. The results show the following: (i) performance worsens when bar coding is used with extensive lot splitting, (ii) process changes such as extensive lot splitting may be required to justify RFID use instead of bar coding, (iii) the earliest operation due date dispatching rule offers an attractive alternative to other rules studied in previous lot splitting research, and (iv) the performance improvements with RFID and increased lot splitting are larger when the setup to processing time ratio is smaller. In a broader context, we fill a research void by quantitatively showing how RFID can be used as an advanced manufacturing technology that enables more factory automation and better performance along several dimensions. The article concludes by summarizing the results and identifying ideas for future research.     

The effects of the warranty cost on the imperfect EMQ model with general discrete shift distribution

In this paper, we investigate the effect of the warranty cost on optimization of the economic manufacturing quality (EMQ). This is done for a deteriorating process where the production process shifts from the in-control state to the out-of-control state following a general discrete probability distribution. Once the production process goes out of control, the production process produces some defective items. The defective item cost includes reworking and warranty costs. Thus, in order to economically operate a production-inventory system with products sold under warranty, the tradeoffs among the production setup, inventory, and defective item cost, including the reworked cost before sale and the warranty cost after sale, needed to be analysed. This objective in this paper is to determine the production lot size while minimizing the total cost per unit of time per unit of time. Various special cases are presented. Two of them are extensions of results obtained previously in the literature. Finally, a numerical example is given which uses a discrete Weibull probability distribution. Sensitivity analysis of the model with respect to cost and time parameters is also performed.     

The effect of MRP lot sizing on actual cumulative lead times in multi-level systems

This study investigates how different lot sizing techniques influence the cumulative lead time for multi-level production-inventory systems controlled by material requirements planning (MRP). Theoretical approaches, a numerical example, as well as simulation are used to analyse and illustrate the combined effect of lot sizing at different product structure levels. It is shown that lot-sizing requirements for more than a single period, such as fixed period requirements, period under quantity, Silver Meal algorithm, as well as economic order quantity will lead to longer actual cumulative lead times than would be expected, when taking the item lead times along the critical path through the product structure into account. Consequently, MRP will underestimate the cumulative lead time and will require a longer planning horizon. We show that the extension of the cumulative lead techniques covering the time is a lot-sizing related phenomenon and cannot be accounted for by, e.g. using safety lead time. Lot-sizing techniques with multi-period coverage will only occasionally provide the 'expected' cumulative lead time. We also show that average and maximum throughput times, as well as throughput time variability increases with increasing time-period coverage of lots.     

A heuristic model for the sequence-dependent lot scheduling problem

This paper presents a heuristic algorithm for finding a good solution for the sequence-dependent lot scheduling problem. Unlike available methods, the algorithm eliminates the need for creating new artificial problems and implementing feasibility tests. It also eliminates the tedious task of translating setup relationships into a mathematical programming formulation. The result is a conceptually simple solution technique that is practically motivated and easily implemented for use on the shop floor. Comparison of algorithm performance with published results demonstrates the efficacy of the approach.