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Managing Stochastic Multiproduct Systems: Model, Measures, and Analysis

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  • Ravi Anupindi

    (Northwestern University, Evanston, Illinois)

  • Sridhar Tayur

    (Carnegie Mellon University, Pittsburgh, Pennsylvania)

Abstract

We consider a model for managing a single stage that produces multiple items. The production rates are finite, and there are switchover times. The interarrival times and quantities of demands for the items are random, and demand may occur for a set of items. We consider order focussed measures: cost based on response times; service levels based on quoted lead times and Type-1 service.We operate the stage in the following manner: (1) there is a cyclic schedule that determines the sequence of items and the number of times a particular item is produced in a cycle; (2) given a cyclic schedule, production of each item follows a modified base-stock policy or a ( s , S ) policy. We present a simulation based procedure to obtain good values for the base stock levels or S (for any fixed S − s ) for each of the above performance measures. Numerical results indicate that good solutions can be obtained with modest computational effort. We also report on a real world implementation of this model.

Suggested Citation

  • Ravi Anupindi & Sridhar Tayur, 1998. "Managing Stochastic Multiproduct Systems: Model, Measures, and Analysis," Operations Research, INFORMS, vol. 46(3-supplem), pages 98-111, June.
    • Handle: RePEc:inm:oropre:v:46:y:1998:i:3-supplement-3:p:s98-s111
    DOI: 10.1287/opre.46.3.S98
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    References listed on IDEAS

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    1. Sridhar Bashyam & Michael C. Fu, 1994. "Application of perturbation analysis to a class of periodic review (s, S) inventory systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(1), pages 47-80, February.
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    Cited by:

    1. 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.
    2. Winands, E.M.M. & Adan, I.J.B.F. & van Houtum, G.J., 2011. "The stochastic economic lot scheduling problem: A survey," European Journal of Operational Research, Elsevier, vol. 210(1), pages 1-9, April.
    3. Kamath B, Narasimha & Bhattacharya, Subir, 2007. "Lead time minimization of a multi-product, single-processor system: A comparison of cyclic policies," International Journal of Production Economics, Elsevier, vol. 106(1), pages 28-40, March.
    4. Lopez de Haro, Santiago & Gershwin, Stanley B. & Rosenfield, Donald B., 2009. "Schedule evaluation in unstable manufacturing environments," International Journal of Production Economics, Elsevier, vol. 121(1), pages 183-194, September.
    5. Katerina P. Papadaki & Warren B. Powell, 2003. "An adaptive dynamic programming algorithm for a stochastic multiproduct batch dispatch problem," Naval Research Logistics (NRL), John Wiley & Sons, vol. 50(7), pages 742-769, October.
    6. Jing-Sheng Song, 1998. "On the Order Fill Rate in a Multi-Item, Base-Stock Inventory System," Operations Research, INFORMS, vol. 46(6), pages 831-845, December.
    7. Jodlbauer, Herbert & Reitner, Sonja, 2012. "Optimizing service-level and relevant cost for a stochastic multi-item cyclic production system," International Journal of Production Economics, Elsevier, vol. 136(2), pages 306-317.
    8. Sridhar Tayur, 2017. "OM Forum—An Essay on Operations Management," Manufacturing & Service Operations Management, INFORMS, vol. 19(4), pages 526-533, October.
    9. David M. Markowitz & Martin I. Reiman & Lawrence M. Wein, 2000. "The Stochastic Economic Lot Scheduling Problem: Heavy Traffic Analysis of Dynamic Cyclic Policies," Operations Research, INFORMS, vol. 48(1), pages 136-154, February.
    10. Jing-Sheng Song & Susan H. Xu & Bin Liu, 1999. "Order-Fulfillment Performance Measures in an Assemble-to-Order System with Stochastic Leadtimes," Operations Research, INFORMS, vol. 47(1), pages 131-149, February.
    11. Sridhar Tayur, 2000. "Improving Operations and Quoting Accurate Lead Times in a Laminate Plant," Interfaces, INFORMS, vol. 30(5), pages 1-15, October.

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