IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v36y1990i12p1518-1531.html
   My bibliography  Save this article

The Impact of Uncertainty on a Production Line

Author

Listed:
  • Christopher S. Tang

    (Anderson Graduate School of Management, University of California, Los Angeles, Los Angeles, California 90024)

Abstract

This paper presents a discrete time model of a multi-stage production system that faces two major types of uncertainties: the output rate at each production stage and the demand for the finished product. Our goal is to analyze the impact of these uncertainties on the production level and on the inventory level at each stage in order to provide insights for production planning, inventory control, quality improvement, and capacity planning. We propose a scheme in which a complex production rule is approximated by a linear production rule (that follows the "restoration" concept introduced by Denardo and Tang 1988). This linear production rule leads the system to steady state in which the means and the variances of the production and inventory levels can be expressed in closed form. These closed form expressions enable us to develop a simple approach for determining a "good" production rule and for analyzing the impact of increasing the yield rates and reducing the variance of the demand. The goodness of this approximation scheme is illustrated by an example.

Suggested Citation

  • Christopher S. Tang, 1990. "The Impact of Uncertainty on a Production Line," Management Science, INFORMS, vol. 36(12), pages 1518-1531, December.
    • Handle: RePEc:inm:ormnsc:v:36:y:1990:i:12:p:1518-1531
    DOI: 10.1287/mnsc.36.12.1518
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.36.12.1518
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.36.12.1518?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Awi Federgruen & Nan Yang, 2014. "Infinite Horizon Strategies for Replenishment Systems with a General Pool of Suppliers," Operations Research, INFORMS, vol. 62(1), pages 141-159, February.
    2. Kim, Ilhyung & Tang, Christopher S., 1997. "Lead time and response time in a pull production control system," European Journal of Operational Research, Elsevier, vol. 101(3), pages 474-485, September.
    3. Talay, Işılay & Özdemir-Akyıldırım, Öznur, 2019. "Optimal procurement and production planning for multi-product multi-stage production under yield uncertainty," European Journal of Operational Research, Elsevier, vol. 275(2), pages 536-551.
    4. Juhwen Hwang & Medini R. Singh, 1998. "Optimal Production Policies for Multi-Stage Systems with Setup Costs and Uncertain Capacities," Management Science, INFORMS, vol. 44(9), pages 1279-1294, September.
    5. Ferrer, Geraldo, 2003. "Yield information and supplier responsiveness in remanufacturing operations," European Journal of Operational Research, Elsevier, vol. 149(3), pages 540-556, September.
    6. Ouyang, Yanfeng, 2007. "The effect of information sharing on supply chain stability and the bullwhip effect," European Journal of Operational Research, Elsevier, vol. 182(3), pages 1107-1121, November.
    7. Hadjinicola, George C. & Soteriou, Andreas C., 2003. "Reducing the cost of defects in multistage production systems: A budget allocation perspective," European Journal of Operational Research, Elsevier, vol. 145(3), pages 621-634, March.
    8. Subba Rao, S. & Gunasekaran, A. & Goyal, S. K. & Martikainen, T., 1998. "Waiting line model applications in manufacturing," International Journal of Production Economics, Elsevier, vol. 54(1), pages 1-28, January.
    9. G C Hadjinicola, 2010. "Manufacturing costs in serial production systems with rework," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(2), pages 342-351, February.
    10. Kim, Ilhyung, 1998. "Managing variances in manufacturing system design," European Journal of Operational Research, Elsevier, vol. 109(3), pages 571-586, September.
    11. L. Gong & H. Matsuo, 1997. "Control Policy for a Manufacturing System with Random Yield and Rework," Journal of Optimization Theory and Applications, Springer, vol. 95(1), pages 149-175, October.
    12. Tang, Christopher S., 2006. "Perspectives in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 103(2), pages 451-488, October.
    13. Weng, Z. Kevin, 1998. "Managing production with flexible capacity deployment for serial multi-stage manufacturing systems," European Journal of Operational Research, Elsevier, vol. 109(3), pages 587-598, September.
    14. Scott Webster & Z. Kevin Weng, 2001. "Improving Repetitive Manufacturing Systems: Model and Insights," Operations Research, INFORMS, vol. 49(1), pages 99-106, February.
    15. Ken Moon & Patrick Bergemann & Daniel Brown & Andrew Chen & James Chu & Ellen A. Eisen & Gregory M. Fischer & Prashant Loyalka & Sungmin Rho & Joshua Cohen, 2023. "Manufacturing Productivity with Worker Turnover," Management Science, INFORMS, vol. 69(4), pages 1995-2015, April.
    16. Kut C. So & Christopher S. Tang, 2000. "Modeling the Impact of an Outcome-Oriented Reimbursement Policy on Clinic, Patients, and Pharmaceutical Firms," Management Science, INFORMS, vol. 46(7), pages 875-892, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:36:y:1990:i:12:p:1518-1531. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.