TY - JOUR
T1 - A hybrid manufacturing system with demand for intermediate goods and controllable make-to-stock production rate
AU - Kim, Hyunjung
AU - Kim, Eungab
N1 - Funding Information:
This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea ( NRF-2020S1A5A2A01041786 ).
Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022
Y1 - 2022
N2 - This paper presents a two-stage hybrid manufacturing system in which the first stage produces semifinished products to store as intermediate inventory in a make-to-stock mode, whereas the second stage produces customized products from semifinished goods in a make-to-order mode. The system faces external demand for semifinished goods with a compound Poisson process and has the option of controlling the make-to-stock production rate. We study the problem of coordinating the controls of order admission, make-to-stock production rate, and inventory rationing for SP demand. The problem is formulated as a Markov decision process model. We identify the structural properties of optimal policies to maximize the long-run average profit. Using a numerical experiment, we examine how the flexibility in make-to-stock production rate and the inventory rationing for semifinished product demand can affect the system performance. We also propose a heuristic and evaluate its effectiveness using example problems.
AB - This paper presents a two-stage hybrid manufacturing system in which the first stage produces semifinished products to store as intermediate inventory in a make-to-stock mode, whereas the second stage produces customized products from semifinished goods in a make-to-order mode. The system faces external demand for semifinished goods with a compound Poisson process and has the option of controlling the make-to-stock production rate. We study the problem of coordinating the controls of order admission, make-to-stock production rate, and inventory rationing for SP demand. The problem is formulated as a Markov decision process model. We identify the structural properties of optimal policies to maximize the long-run average profit. Using a numerical experiment, we examine how the flexibility in make-to-stock production rate and the inventory rationing for semifinished product demand can affect the system performance. We also propose a heuristic and evaluate its effectiveness using example problems.
KW - Compound Poisson demand process
KW - Controllable production rate
KW - Demand rationing
KW - Hybrid manufacturing
KW - Inventory
UR - http://www.scopus.com/inward/record.url?scp=85128236070&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2022.03.039
DO - 10.1016/j.ejor.2022.03.039
M3 - Article
AN - SCOPUS:85128236070
SN - 0377-2217
JO - European Journal of Operational Research
JF - European Journal of Operational Research
ER -