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Setting Planned Leadtimes in Serial Production Systems with Tardiness Costs

Author

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  • Candace Arai Yano

    (Department of Industrial and Operations Engineering, University of Michigan, Ann Arbor, Michigan 48109-2117)

Abstract

We investigate the problem of determining optimal planned leadtimes in serial production systems in which the actual procurement and processing times may be stochastic. The objective is to minimize the sum of inventory holding costs and job tardiness costs given a customer specified due-date. We present a general solution procedure for two stage serial systems, which for most cost structures and leadtime distributions is a single-pass algorithm. We also indicate how the procedure can be extended to N-stage systems. We present computational results which provide some insight into the characteristics of optimal safety time policies.

Suggested Citation

  • Candace Arai Yano, 1987. "Setting Planned Leadtimes in Serial Production Systems with Tardiness Costs," Management Science, INFORMS, vol. 33(1), pages 95-106, January.
    • Handle: RePEc:inm:ormnsc:v:33:y:1987:i:1:p:95-106
    DOI: 10.1287/mnsc.33.1.95
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    Cited by:

    1. Jansen, Sjors & Atan, Zümbül & Adan, Ivo & Kok, Ton de, 2019. "Setting optimal planned leadtimes in configure-to-order assembly systems," European Journal of Operational Research, Elsevier, vol. 273(2), pages 585-595.
    2. Louly, Mohamed-Aly & Dolgui, Alexandre, 2011. "Optimal time phasing and periodicity for MRP with POQ policy," International Journal of Production Economics, Elsevier, vol. 131(1), pages 76-86, May.
    3. Hum, Sin-Hoon & Parlar, Mahmut & Zhou, Yun, 2018. "Measurement and optimization of responsiveness in supply chain networks with queueing structures," European Journal of Operational Research, Elsevier, vol. 264(1), pages 106-118.
    4. Altendorfer, Klaus & Minner, Stefan, 2011. "Simultaneous optimization of capacity and planned lead time in a two-stage production system with different customer due dates," European Journal of Operational Research, Elsevier, vol. 213(1), pages 134-146, August.
    5. Song, Dong-Ping, 2006. "Raw material release time control for complex make-to-order products with stochastic processing times," International Journal of Production Economics, Elsevier, vol. 103(1), pages 371-385, September.
    6. Liming Liu & Mahmut Parlar & Stuart X. Zhu, 2007. "Pricing and Lead Time Decisions in Decentralized Supply Chains," Management Science, INFORMS, vol. 53(5), pages 713-725, May.
    7. Weixin Shang & Liming Liu, 2011. "Promised Delivery Time and Capacity Games in Time-Based Competition," Management Science, INFORMS, vol. 57(3), pages 599-610, March.
    8. Grout, John R., 1997. "A model of incentive contracts for just-in-time delivery," European Journal of Operational Research, Elsevier, vol. 96(1), pages 139-147, January.
    9. Louly, Mohamed-Aly & Dolgui, Alexandre & Hnaien, Faicel, 2008. "Supply planning for single-level assembly system with stochastic component delivery times and service-level constraint," International Journal of Production Economics, Elsevier, vol. 115(1), pages 236-247, September.
    10. Shi Chen & Hau Lee, 2017. "Incentive Alignment and Coordination of Project Supply Chains," Management Science, INFORMS, vol. 63(4), pages 1011-1025, April.
    11. Wilhelm, W. E. & Som, Pradip, 1998. "Analysis of a single-stage, single-product, stochastic, MRP-controlled assembly system," European Journal of Operational Research, Elsevier, vol. 108(1), pages 74-93, July.
    12. Zhai, Yue & Hua, Guowei & Cheng, Meng & Cheng, T.C.E., 2023. "Production lead-time hedging and order allocation in an MTO supply chain," European Journal of Operational Research, Elsevier, vol. 311(3), pages 887-905.
    13. Zümbül Atan & Ton de Kok & Nico P. Dellaert & Richard van Boxel & Fred Janssen, 2016. "Setting Planned Leadtimes in Customer-Order-Driven Assembly Systems," Manufacturing & Service Operations Management, INFORMS, vol. 18(1), pages 122-140, February.
    14. Manuel Díaz-Madroñero & Josefa Mula & Mariano Jiménez & David Peidro, 2017. "A rolling horizon approach for material requirement planning under fuzzy lead times," International Journal of Production Research, Taylor & Francis Journals, vol. 55(8), pages 2197-2211, April.
    15. Candace Arai Yano, 1987. "Stochastic leadtimes in two‐level distribution‐type networks," Naval Research Logistics (NRL), John Wiley & Sons, vol. 34(6), pages 831-843, December.
    16. Zhai, Yue & Cheng, T.C.E., 2022. "Lead-time quotation and hedging coordination in make-to-order supply chain," European Journal of Operational Research, Elsevier, vol. 300(2), pages 449-460.
    17. Altendorfer, Klaus, 2015. "Influence of lot size and planned lead time on service level and inventory for a single-stage production system with advance demand information and random required lead times," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 478-488.
    18. Rong Yuan & Stephen C. Graves, 2016. "Setting optimal production lot sizes and planned lead times in a job shop," International Journal of Production Research, Taylor & Francis Journals, vol. 54(20), pages 6105-6120, October.
    19. Illana Bendavid & Yariv N. Marmor & Boris Shnits, 2018. "Developing an optimal appointment scheduling for systems with rigid standby time under pre-determined quality of service," Flexible Services and Manufacturing Journal, Springer, vol. 30(1), pages 54-77, June.
    20. Fujiwara, Okitsugu & Sedarage, Dayani, 1997. "An optimal (Q,r) policy for a multipart assembly system under stochastic part procurement lead times," European Journal of Operational Research, Elsevier, vol. 100(3), pages 550-556, August.
    21. Jiejian Feng & Liming Liu & Xiaoming Liu, 2011. "TECHNICAL NOTE---An Optimal Policy for Joint Dynamic Price and Lead-Time Quotation," Operations Research, INFORMS, vol. 59(6), pages 1523-1527, December.
    22. Weng, Z. Kevin, 1996. "Manufacturing lead times, system utilization rates and lead-time-related demand," European Journal of Operational Research, Elsevier, vol. 89(2), pages 259-268, March.
    23. Ben-Ammar, Oussama & Dolgui, Alexandre & Wu, Desheng Dash, 2018. "Planned lead times optimization for multi-level assembly systems under uncertainties," Omega, Elsevier, vol. 78(C), pages 39-56.
    24. Yucesan, Enver & de Groote, Xavier, 2000. "Lead times, order release mechanisms, and customer service," European Journal of Operational Research, Elsevier, vol. 120(1), pages 118-130, January.
    25. Julia Pahl & Stefan Voß & David Woodruff, 2007. "Production planning with load dependent lead times: an update of research," Annals of Operations Research, Springer, vol. 153(1), pages 297-345, September.

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