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Deux Chemicals Inc. Goes Just-in-Time

Author

Listed:
  • Moshe Dror

    (Eller College of Management, University of Arizona, Tucson, Arizona 85721)

  • Kenneth R. Smith

    (Eller College of Management, University of Arizona, Tucson, Arizona 85721)

  • Candace Arai Yano

    (Industrial Engineering and Operations Research Department, and Haas School of Business, University of California, Berkeley, Berkeley, California 94720)

Abstract

Deux Chemicals Inc. (a pseudonym) decided to offer its customers reliable just-in-time delivery to reduce the customers' need to hold chemicals that are difficult and expensive to store. Although its manufacturing facilities are reliable, they occasionally require unscheduled repairs that could take up to three weeks to complete. To ensure reliable supply to its customers, Deux Chemicals holds safety stock; however, it needed to determine how much additional storage capacity it would require to support its just-in-time promise. We present a methodology to determine safety-stock levels and storage capacity requirements to achieve high levels of customer service, and a production control policy that helps to minimize safety stock and storage needs. The methodology enabled Deux Chemicals to identify an economical strategy for safety stock and its storage that will allow the company to significantly reduce its risk of shortages.

Suggested Citation

  • Moshe Dror & Kenneth R. Smith & Candace Arai Yano, 2009. "Deux Chemicals Inc. Goes Just-in-Time," Interfaces, INFORMS, vol. 39(6), pages 503-515, December.
    • Handle: RePEc:inm:orinte:v:39:y:2009:i:6:p:503-515
    DOI: 10.1287/inte.1090.0456
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    References listed on IDEAS

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    Cited by:

    1. Dhahri, Akrem & Gharbi, Ali & Ouhimmou, Mustapha, 2022. "Integrated production-transshipment control policy for a two-location unreliable manufacturing system," International Journal of Production Economics, Elsevier, vol. 247(C).
    2. Assid, M. & Gharbi, A. & Dhouib, K., 2015. "Joint production and subcontracting planning of unreliable multi-facility multi-product production systems," Omega, Elsevier, vol. 50(C), pages 54-69.
    3. Rivera-Gómez, Héctor & Gharbi, Ali & Kenné, Jean-Pierre & Montaño-Arango, Oscar & Hernandez-Gress, Eva Selene, 2016. "Production control problem integrating overhaul and subcontracting strategies for a quality deteriorating manufacturing system," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 134-150.
    4. Rivera-Gómez, Héctor & Gharbi, Ali & Kenné, Jean-Pierre & Montaño-Arango, Oscar & Hernández-Gress, Eva Selene, 2018. "Subcontracting strategies with production and maintenance policies for a manufacturing system subject to progressive deterioration," International Journal of Production Economics, Elsevier, vol. 200(C), pages 103-118.

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