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Optimal work order release for make-to-order job shops with customer order lead-time costs, tardiness costs and work-in-process costs

Author

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  • Betrand, J.W.M.
  • van Ooijen, H.P.G.

Abstract

Work order release mainly has been studied with regard to its impact on throughput, throughput time and work-in-process. In this research, we investigate work order release from an economic perspective. We study the situations where there are costs associated with the length of the customer order lead-time, the order tardiness and the work-in-process on the shop floor. Our research aims at minimizing the sum of these three costs. We derive expressions for the optimal value for the maximum number of orders that is allowed to be in process. Numerical analysis of a job shop model is used to investigate the reduction in total costs that results from optimally controlling the work-in-process as compared to the total costs under immediate release of arriving orders. The results show that cost reductions can be substantial for small shops, and for high ratios of work-in-process costs to lead-time costs.

Suggested Citation

  • Betrand, J.W.M. & van Ooijen, H.P.G., 2008. "Optimal work order release for make-to-order job shops with customer order lead-time costs, tardiness costs and work-in-process costs," International Journal of Production Economics, Elsevier, vol. 116(2), pages 233-241, December.
    • Handle: RePEc:eee:proeco:v:116:y:2008:i:2:p:233-241
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    References listed on IDEAS

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    1. Land, Martin J. & Gaalman, Gerard J. C., 1998. "The performance of workload control concepts in job shops: Improving the release method," International Journal of Production Economics, Elsevier, vol. 56(1), pages 347-364, September.
    2. Kingsman, Brian G., 2000. "Modelling input-output workload control for dynamic capacity planning in production planning systems," International Journal of Production Economics, Elsevier, vol. 68(1), pages 73-93, October.
    3. Henrich, Peter & Land, Martin & Gaalman, Gerard, 2004. "Exploring applicability of the workload control concept," International Journal of Production Economics, Elsevier, vol. 90(2), pages 187-198, July.
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    Cited by:

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    2. Stevenson, Mark & Huang, Yuan & Hendry, Linda C. & Soepenberg, Erik, 2011. "The theory and practice of workload control: A research agenda and implementation strategy," International Journal of Production Economics, Elsevier, vol. 131(2), pages 689-700, June.
    3. Altendorfer, Klaus & Jodlbauer, Herbert, 2011. "Which utilization and service level lead to the maximum EVA?," International Journal of Production Economics, Elsevier, vol. 130(1), pages 16-26, March.
    4. Öner-Közen, Miray & Minner, Stefan, 2017. "Impact of priority sequencing decisions on on-time probability and expected tardiness of orders in make-to-order production systems with external due-dates," European Journal of Operational Research, Elsevier, vol. 263(2), pages 524-539.

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