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Dynamic Scheduling of a Production/Inventory System with By-Products and Random Yield

Author

Listed:
  • Jihong Ou

    (Department of Decision Sciences, Faculty of Business Administration, National University of Singapore, Singapore 0511)

  • Lawrence M. Wein

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

Abstract

Motivated by semiconductor wafer fabrication, we consider a scheduling problem for a single-server multiclass queue. A single workstation fabricates semiconductor wafers according to a variety of different processes, where each process consists of multiple stages of service with a different general service time distribution at each stage. A batch (or lot) of wafers produced according to a particular process randomly yields chips of many different product types, and completed chips of each type enter a finished goods inventory that services exogenous customer demand for that type. The scheduling problem is to dynamically decide whether the server should be idle or working, and in the latter case, to decide which stage of which process type to serve next. The objective is to minimize the long run expected average cost, which includes costs for holding work-in-process inventory (which may differ by process type and service stage) and backordering and holding finished goods inventory (which may differ by product type). We assume the workstation must be busy the great majority of the time in order to satisfy customer demand, and approximate the scheduling problem by a control problem involving Brownian motion. A scheduling policy is derived by interpreting the exact solution to the Brownian control problem in terms of the production/inventory system. The proposed dynamic scheduling policy takes a relatively simple form and appears to be effective in numerical studies.

Suggested Citation

  • Jihong Ou & Lawrence M. Wein, 1995. "Dynamic Scheduling of a Production/Inventory System with By-Products and Random Yield," Management Science, INFORMS, vol. 41(6), pages 1000-1017, June.
  • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:6:p:1000-1017
    DOI: 10.1287/mnsc.41.6.1000
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    Citations

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    Cited by:

    1. Oner, Selma & Bilgic, Taner, 2008. "Economic lot scheduling with uncontrolled co-production," European Journal of Operational Research, Elsevier, vol. 188(3), pages 793-810, August.
    2. Anantaram Balakrishnan & Joseph Geunes, 2000. "Requirements Planning with Substitutions: Exploiting Bill-of-Materials Flexibility in Production Planning," Manufacturing & Service Operations Management, INFORMS, vol. 2(2), pages 166-185, January.
    3. Benyoucef, Lyes & Frein, Yannick & Penz, Bernard, 2001. "Optimal solution for a two-product dynamic scheduling problem in a just-in-time environment," International Journal of Production Economics, Elsevier, vol. 74(1-3), pages 85-91, December.

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