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Performance Analysis of a Multi-Item Production-Inventory System Under Alternative Policies

Author

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  • Paul H. Zipkin

    (Graduate School of Business, Columbia University, New York, New York 10027)

Abstract

This paper explores the performance of a multi-item production-inventory system. We compare two alternative policies, representing different modes of collecting and utilizing information. We derive a closed-form measure of performance for one of them, the familiar first-come-first-served (FCFS) policy, and propose a comparable approximation for the other, the longest-queue (LQ) policy. These results are illustrated and tested through simulations. In this way we address several basic managerial issues: What is the value of centralized information in complex systems? How does the breadth of the product line affect performance?

Suggested Citation

  • Paul H. Zipkin, 1995. "Performance Analysis of a Multi-Item Production-Inventory System Under Alternative Policies," Management Science, INFORMS, vol. 41(4), pages 690-703, April.
    • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:4:p:690-703
    DOI: 10.1287/mnsc.41.4.690
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    Cited by:

    1. William Liang & Barış Balcıog̃lu & Robert Svaluto, 2013. "Scheduling policies for a repair shop problem," Annals of Operations Research, Springer, vol. 211(1), pages 273-288, December.
    2. Albert Y. Ha, 2000. "Stock Rationing in an M/E k /1 Make-to-Stock Queue," Management Science, INFORMS, vol. 46(1), pages 77-87, January.
    3. Francis De Vericourt & Fikri Karaesmen & Yves Dallery, 2000. "Dynamic Scheduling in a Make-to-Stock System: A Partial Characterization of Optimal Policies," Operations Research, INFORMS, vol. 48(5), pages 811-819, October.
    4. Saif Benjaafar & William L. Cooper & Joon-Seok Kim, 2005. "On the Benefits of Pooling in Production-Inventory Systems," Management Science, INFORMS, vol. 51(4), pages 548-565, April.
    5. Guodong (Gordon) Gao & Lorin M. Hitt, 2012. "Information Technology and Trademarks: Implications for Product Variety," Management Science, INFORMS, vol. 58(6), pages 1211-1226, June.
    6. Ganesh Janakiraman & Mahesh Nagarajan & Senthil Veeraraghavan, 2018. "Simple Policies for Managing Flexible Capacity," Manufacturing & Service Operations Management, INFORMS, vol. 20(2), pages 333-346, May.
    7. Sanajian, Nima & BalcIog[small tilde]lu, BarIs, 2009. "The impact of production time variability on make-to-stock queue performance," European Journal of Operational Research, Elsevier, vol. 194(3), pages 847-855, May.
    8. Huang, Shui-Mu & Su, Jack C.P., 2013. "Impact of product proliferation on the reverse supply chain," Omega, Elsevier, vol. 41(3), pages 626-639.
    9. Saif Benjaafar & Yanzhi Li & Dongsheng Xu & Samir Elhedhli, 2008. "Demand Allocation in Systems with Multiple Inventory Locations and Multiple Demand Sources," Manufacturing & Service Operations Management, INFORMS, vol. 10(1), pages 43-60, October.
    10. Haim Mendelson & Ali K. Parlaktürk, 2008. "Product-Line Competition: Customization vs. Proliferation," Management Science, INFORMS, vol. 54(12), pages 2039-2053, December.
    11. Thonemann, Ulrich W. & Bradley, James R., 2002. "The effect of product variety on supply-chain performance," European Journal of Operational Research, Elsevier, vol. 143(3), pages 548-569, December.
    12. Achal Bassamboo & Ramandeep S. Randhawa & Jan A. Van Mieghem, 2012. "A Little Flexibility Is All You Need: On the Asymptotic Value of Flexible Capacity in Parallel Queuing Systems," Operations Research, INFORMS, vol. 60(6), pages 1423-1435, December.
    13. Srinagesh Gavirneni & Roman Kapuscinski & Sridhar Tayur, 1999. "Value of Information in Capacitated Supply Chains," Management Science, INFORMS, vol. 45(1), pages 16-24, January.
    14. Bora Kat & Zeynep Avṣar, 2011. "Using aggregate fill rate for dynamic scheduling of multi-class systems," Annals of Operations Research, Springer, vol. 182(1), pages 87-117, January.
    15. H. G. H. Tiemessen & M. Fleischmann & G. J. Houtum, 2017. "Dynamic control in multi-item production/inventory systems," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(1), pages 165-191, January.
    16. Jan A. Van Mieghem, 2003. "Due-Date Scheduling: Asymptotic Optimality of Generalized Longest Queue and Generalized Largest Delay Rules," Operations Research, INFORMS, vol. 51(1), pages 113-122, February.
    17. Topan, E. & Eruguz, A.S. & Ma, W. & van der Heijden, M.C. & Dekker, R., 2020. "A review of operational spare parts service logistics in service control towers," European Journal of Operational Research, Elsevier, vol. 282(2), pages 401-414.
    18. Srinagesh Gavirneni & Sridhar Tayur, 1999. "Managing a Customer Following a Target Reverting Policy," Manufacturing & Service Operations Management, INFORMS, vol. 1(2), pages 157-173.
    19. Saif Benjaafar & Mohsen ElHafsi & Francis de Véricourt, 2004. "Demand Allocation in Multiple-Product, Multiple-Facility, Make-to-Stock Systems," Management Science, INFORMS, vol. 50(10), pages 1431-1448, October.
    20. Ayd{i}n Alptekinou{g}lu & Charles J. Corbett, 2010. "Leadtime-Variety Tradeoff in Product Differentiation," Manufacturing & Service Operations Management, INFORMS, vol. 12(4), pages 569-582, January.
    21. Menezes, Mozart B.C. & Jalali, Hamed & Lamas, Alejandro, 2021. "One too many: Product proliferation and the financial performance in manufacturing," International Journal of Production Economics, Elsevier, vol. 242(C).
    22. Jain, Apurva, 2007. "Value of capacity pooling in supply chains with heterogeneous customers," European Journal of Operational Research, Elsevier, vol. 177(1), pages 239-260, February.
    23. Li, Xiuhui & Wang, Qinan, 2007. "Coordination mechanisms of supply chain systems," European Journal of Operational Research, Elsevier, vol. 179(1), pages 1-16, May.
    24. N Sanajian & H Abouee-Mehrizi & B Balcıog̃lu, 2010. "Scheduling policies in the M/G/1 make-to-stock queue," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(1), pages 115-123, January.

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