IDEAS home Printed from https://ideas.repec.org/a/eee/oprepe/v6y2019ics2214716018302720.html
   My bibliography  Save this article

Production planning incorporating issues of reliability and backlogging with service level constraint

Author

Listed:
  • Chiu, Singa Wang
  • Liang, Gang-Ming
  • Chiu, Yuan-Shyi Peter
  • Chiu, Tiffany

Abstract

To stay competitive in present-day turbulent business environment, managers of manufacturing firms must achieve crucial operational goals, such as maintaining product quality, reducing operating costs, and attaining customer satisfaction. In real manufacturing systems, allowing backordering sometimes can be an effective strategy to help smooth manufacturing schedules and lower operating costs. However, the consequence of excessive shortages is the undesirable service level which reduces customer satisfaction and goodwill. To cope with this unwanted result, a maximal permitted backlogging level is set as an operating constraint to achieve the minimum required service level. Also, production of scrap items and stochastic breakdown are both inevitable in the manufacturing processes. Motivated by addressing aforementioned issues and providing insight information to managers for supporting their operational decision makings, this paper investigates the optimal runtime for a fabrication system with backordering, service level constraint, stochastic breakdown, and scrap. Mathematical model was developed and optimization methods are used to decide the optimal runtime that minimizes total system costs. Various key insights relating to joint impacts of backlogging, service level, stochastic breakdown, and scrap on the optimal runtime decision are revealed through a numerical illustration along with sensitivity analyses.

Suggested Citation

  • Chiu, Singa Wang & Liang, Gang-Ming & Chiu, Yuan-Shyi Peter & Chiu, Tiffany, 2019. "Production planning incorporating issues of reliability and backlogging with service level constraint," Operations Research Perspectives, Elsevier, vol. 6(C).
  • Handle: RePEc:eee:oprepe:v:6:y:2019:i:c:s2214716018302720
    DOI: 10.1016/j.orp.2018.100090
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214716018302720
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.orp.2018.100090?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Harry Groenevelt & Liliane Pintelon & Abraham Seidmann, 1992. "Production Lot Sizing with Machine Breakdowns," Management Science, INFORMS, vol. 38(1), pages 104-123, January.
    2. Gede Agus Widyadana & Hui Ming Wee, 2012. "An economic production quantity model for deteriorating items with preventive maintenance policy and random machine breakdown," International Journal of Systems Science, Taylor & Francis Journals, vol. 43(10), pages 1870-1882.
    3. Chiu, Singa Wang & Chou, Chung-Li & Wu, Wen-Kuei, 2013. "Optimizing replenishment policy in an EPQ-based inventory model with nonconforming items and breakdown," Economic Modelling, Elsevier, vol. 35(C), pages 330-337.
    4. A. G. de Kok, 1985. "Approximations for a Lost-Sales Production/Inventory Control Model with Service Level Constraints," Management Science, INFORMS, vol. 31(6), pages 729-737, June.
    5. Abbas Sheikh Aboumasoudi & Saeed Mirzamohammadi Ahmad Makui & Ahmad Makui & Jolanta Tamošaitienė, 2016. "Development of Network-Ranking Model to Create the Best Production Line Value Chain: A Case Study in Textile Industry," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(1), pages 215-234.
    6. Seyed Mahmood KAZEMI & Masoud RABBANI & Reza TAVAKKOLI-MOGHADDAM & Farid Abolhassani SHAHREZA, 2017. "An Exact Solution for Joint Optimization of Inventory and Routing Decisions in Blood Supply Chains: A Case Study," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 51(4), pages 315-333.
    7. Evan L. Porteus, 1986. "Optimal Lot Sizing, Process Quality Improvement and Setup Cost Reduction," Operations Research, INFORMS, vol. 34(1), pages 137-144, February.
    8. Saari, Juhamatti & Odelius, Johan, 2018. "Detecting operation regimes using unsupervised clustering with infected group labelling to improve machine diagnostics and prognostics," Operations Research Perspectives, Elsevier, vol. 5(C), pages 232-244.
    9. Majumder, Pinki & Mondal, Sankar Prasad & Bera, Uttam Kumar & Maiti, Manoranjan, 2016. "Application of Generalized Hukuhara derivative approach in an economic production quantity model with partial trade credit policy under fuzzy environment," Operations Research Perspectives, Elsevier, vol. 3(C), pages 77-91.
    10. Wee, H.M. & Yu, Jonas & Chen, M.C., 2007. "Optimal inventory model for items with imperfect quality and shortage backordering," Omega, Elsevier, vol. 35(1), pages 7-11, February.
    11. Settanni, Ettore & Harrington, Tomás Seosamh & Srai, Jagjit Singh, 2017. "Pharmaceutical supply chain models: A synthesis from a systems view of operations research," Operations Research Perspectives, Elsevier, vol. 4(C), pages 74-95.
    12. Viliam Makis, 1998. "Optimal lot sizing and inspection policy for an EMQ model with imperfect inspections," Naval Research Logistics (NRL), John Wiley & Sons, vol. 45(2), pages 165-186, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Chiu, Singa Wang & Chen, Hui-Cun & Wu, Hua-Yao & Chiu, Yuan-Shyi Peter, 2020. "A hybrid finite production rate system featuring random breakdown and rework," Operations Research Perspectives, Elsevier, vol. 7(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Om Prakash & A.R. Roy & A. Goswami, 2014. "Stochastic manufacturing system with process deterioration and machine breakdown," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(12), pages 2539-2551, December.
    2. Harun Öztürk, 2021. "Optimal production run time for an imperfect production inventory system with rework, random breakdowns and inspection costs," Operational Research, Springer, vol. 21(1), pages 167-204, March.
    3. Dhouib, K. & Gharbi, A. & Ben Aziza, M.N., 2012. "Joint optimal production control/preventive maintenance policy for imperfect process manufacturing cell," International Journal of Production Economics, Elsevier, vol. 137(1), pages 126-136.
    4. Chiu, Yuan-Shyi Peter & Chang, Huei-Hsin, 2014. "Optimal run time for EPQ model with scrap, rework and stochastic breakdowns: A note," Economic Modelling, Elsevier, vol. 37(C), pages 143-148.
    5. Hsu, Jia-Tzer & Hsu, Lie-Fern, 2013. "An EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns," International Journal of Production Economics, Elsevier, vol. 143(1), pages 162-170.
    6. Tien-Yu Lin & Kuo-Lung Hou, 2015. "An imperfect quality economic order quantity with advanced receiving," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 23(2), pages 535-551, July.
    7. Yoo, Seung Ho & Kim, DaeSoo & Park, Myung-Sub, 2009. "Economic production quantity model with imperfect-quality items, two-way imperfect inspection and sales return," International Journal of Production Economics, Elsevier, vol. 121(1), pages 255-265, September.
    8. Chakraborty, Tulika & Giri, B.C. & Chaudhuri, K.S., 2008. "Production lot sizing with process deterioration and machine breakdown," European Journal of Operational Research, Elsevier, vol. 185(2), pages 606-618, March.
    9. Kazaz, Burak & Sloan, Thomas W., 2013. "The impact of process deterioration on production and maintenance policies," European Journal of Operational Research, Elsevier, vol. 227(1), pages 88-100.
    10. W. Pearn & R. Su & M. Weng & C. Hsu, 2011. "Optimal production run time for two-stage production system with imperfect processes and allowable shortages," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 19(4), pages 533-545, December.
    11. Chiu, Singa Wang & Chou, Chung-Li & Wu, Wen-Kuei, 2013. "Optimizing replenishment policy in an EPQ-based inventory model with nonconforming items and breakdown," Economic Modelling, Elsevier, vol. 35(C), pages 330-337.
    12. Harun Öztürk, 2019. "Modeling an inventory problem with random supply, inspection and machine breakdown," OPSEARCH, Springer;Operational Research Society of India, vol. 56(2), pages 497-527, June.
    13. Ivan Darma Wangsa & Hui Ming Wee & Shih-Hsien Tseng, 2019. "A coordinated vendor–buyer system considering loss and damage claims, insurance cost and stochastic lead time," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 10(3), pages 384-398, June.
    14. Zequeira, Romulo I. & Valdes, Jose E. & Berenguer, Christophe, 2008. "Optimal buffer inventory and opportunistic preventive maintenance under random production capacity availability," International Journal of Production Economics, Elsevier, vol. 111(2), pages 686-696, February.
    15. Tseng, Chao-Tang & Wu, Mei-Fang & Lin, Hong-Dar & Chiu, Yuan-Shyi Peter, 2014. "Solving a vendor–buyer integrated problem with rework and a specific multi-delivery policy by a two-phase algebraic approach," Economic Modelling, Elsevier, vol. 36(C), pages 30-36.
    16. Bouslah, Bassem & Gharbi, Ali & Pellerin, Robert, 2013. "Joint optimal lot sizing and production control policy in an unreliable and imperfect manufacturing system," International Journal of Production Economics, Elsevier, vol. 144(1), pages 143-156.
    17. Kevin Hsu, Wen-Kai & Yu, Hong-Fwu, 2009. "EOQ model for imperfective items under a one-time-only discount," Omega, Elsevier, vol. 37(5), pages 1018-1026, October.
    18. Nita Shah & Monika Naik, 2019. "Coordinated production, ordering, shipment and pricing model for supplier-retailer inventory system under trade credit," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 29(2), pages 55-76.
    19. Wakhid Ahmad Jauhari & I Nyoman Pujawan & Mokh Suef, 2023. "Sustainable inventory management with hybrid production system and investment to reduce defects," Annals of Operations Research, Springer, vol. 324(1), pages 543-572, May.
    20. Kim, Chang Hyun & Hong, Yushin, 1997. "An extended EMQ model for a failure prone machine with general lifetime distribution," International Journal of Production Economics, Elsevier, vol. 49(3), pages 215-223, May.

    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:eee:oprepe:v:6:y:2019:i:c:s2214716018302720. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/operations-research-perspectives .

    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.