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Multistage production systems with random yields and rigid demand

Author

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  • Tal Ben-Zvi
  • Abraham Grosfeld-Nir

Abstract

The increased complexity of contemporary manufacturing makes it hard to maintain a predictable level of output. We consider several types of multistage systems in an environment where yield is random, production is in lots and demand needs to be satisfied in its entirety. For each possible configuration of intermediate inventories a production policy must specify the stage at which to produce next and the lot size to be processed. The objective is to minimise the expected total of setup and variable production costs. We show that the expected cost associated with any arbitrary production policy can be calculated by solving a finite set of linear equations. The result is general in that it applies to any yield structure. We also develop efficient heuristics to solve various multistage systems. Selected numerical results are presented for binomial yields.

Suggested Citation

  • Tal Ben-Zvi & Abraham Grosfeld-Nir, 2010. "Multistage production systems with random yields and rigid demand," International Journal of Manufacturing Technology and Management, Inderscience Enterprises Ltd, vol. 20(1/2/3/4), pages 286-299.
    • Handle: RePEc:ids:ijmtma:v:20:y:2010:i:1/2/3/4:p:286-299
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