IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v48y2000i5p709-720.html
   My bibliography  Save this article

Optimal Admission Control and Sequencing in a Make-to-Stock/Make-to-Order Production System

Author

Listed:
  • Scott Carr

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

  • Izak Duenyas

    (University of Michigan, School of Business, Ann Arbor, Michigan 48109)

Abstract

In this paper, we address the problem of admission control and sequencing in a production system that produces two classes of products. The first class of products is made-to-stock, and the firm is contractually obliged to meet demand for this class of products. The second class of products is made-to-order, and the firm has the option to accept (admit) or reject a particular order. The problem is motivated by suppliers in many industries who sign contracts with large manufacturers to supply them with a given product and also can take on additional orders from other sources on a make-to-order basis.We model the joint admission control/sequencing decision in the context of a simple two-class M / M /1 queue to gain insight into the following problems: 1. How should a firm decide (a) when to accept or reject an additional order, and (b) which type of product to produce next? 2. How should a firm decide what annual quantity of orders to commit to when signing a contract to produce the make-to-stock products?

Suggested Citation

  • Scott Carr & Izak Duenyas, 2000. "Optimal Admission Control and Sequencing in a Make-to-Stock/Make-to-Order Production System," Operations Research, INFORMS, vol. 48(5), pages 709-720, October.
    • Handle: RePEc:inm:oropre:v:48:y:2000:i:5:p:709-720
    DOI: 10.1287/opre.48.5.709.12401
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/opre.48.5.709.12401
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.48.5.709.12401?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
    ---><---

    References listed on IDEAS

    as
    1. Viên Nguyen, 1995. "Fluid and Diffusion Approximations of a Two-Station Mixed Queueing Network," Mathematics of Operations Research, INFORMS, vol. 20(2), pages 321-354, May.
    2. Lode Li, 1992. "The Role of Inventory in Delivery-Time Competition," Management Science, INFORMS, vol. 38(2), pages 182-197, February.
    3. Paul Glasserman & David D. Yao, 1994. "Monotone Optimal Control of Permutable GSMPs," Mathematics of Operations Research, INFORMS, vol. 19(2), pages 449-476, May.
    4. Guillermo Gallego, 1990. "Scheduling the Production of Several Items with Random Demands in a Single Facility," Management Science, INFORMS, vol. 36(12), pages 1579-1592, December.
    5. Albert Y. Ha, 1997. "Optimal Dynamic Scheduling Policy for a Make-To-Stock Production System," Operations Research, INFORMS, vol. 45(1), pages 42-53, February.
    6. Izak Duenyas, 1995. "Single Facility Due Date Setting with Multiple Customer Classes," Management Science, INFORMS, vol. 41(4), pages 608-619, April.
    7. Izak Duenyas & Wallace J. Hopp & Yehuda Bassok, 1997. "Production Quotas as Bounds on Interplant JIT Contracts," Management Science, INFORMS, vol. 43(10), pages 1372-1386, October.
    8. Albert Y. Ha, 1997. "Inventory Rationing in a Make-to-Stock Production System with Several Demand Classes and Lost Sales," Management Science, INFORMS, vol. 43(8), pages 1093-1103, August.
    9. Awi Federgruen & Ziv Katalan, 1996. "The Stochastic Economic Lot Scheduling Problem: Cyclical Base-Stock Policies with Idle Times," Management Science, INFORMS, vol. 42(6), pages 783-796, June.
    10. Albert Y. Ha, 1997. "Stock‐rationing policy for a make‐to‐stock production system with two priority classes and backordering," Naval Research Logistics (NRL), John Wiley & Sons, vol. 44(5), pages 457-472, August.
    11. Izak Duenyas & Mark P. Van Oyen, 1996. "Heuristic Scheduling of Parallel Heterogeneous Queues with Set-Ups," Management Science, INFORMS, vol. 42(6), pages 814-829, June.
    Full references (including those not matched with items on IDEAS)

    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. David M. Markowitz & Lawrence M. Wein, 2001. "Heavy Traffic Analysis of Dynamic Cyclic Policies: A Unified Treatment of the Single Machine Scheduling Problem," Operations Research, INFORMS, vol. 49(2), pages 246-270, April.
    2. Modarres, Mohammad & Sharifyazdi, Mehdi, 2009. "Revenue management approach to stochastic capacity allocation problem," European Journal of Operational Research, Elsevier, vol. 192(2), pages 442-459, January.
    3. Feng, Jiejian & Zhang, Michael, 2017. "Dynamic quotation of leadtime and price for a Make-To-Order system with multiple customer classes and perfect information on customer preferences," European Journal of Operational Research, Elsevier, vol. 258(1), pages 334-342.
    4. Zhuang, Weifen & Li, Michael Z.F., 2012. "Monotone optimal control for a class of Markov decision processes," European Journal of Operational Research, Elsevier, vol. 217(2), pages 342-350.
    5. Secil Savasaneril & Ece Sayin, 2017. "Dynamic lead time quotation under responsive inventory and multiple customer classes," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(1), pages 95-135, January.
    6. Hui Zhao & Jennifer K. Ryan & Vinayak Deshpande, 2008. "Optimal Dynamic Production and Inventory Transshipment Policies for a Two-Location Make-to-Stock System," Operations Research, INFORMS, vol. 56(2), pages 400-410, April.
    7. Xiuli Chao & Frank Y. Chen, 2005. "An Optimal Production and Shutdown Strategy when a Supplier Offers an Incentive Program," Manufacturing & Service Operations Management, INFORMS, vol. 7(2), pages 130-143, March.
    8. Kim, Eungab, 2005. "Optimal inventory replenishment policy for a queueing system with finite waiting room capacity," European Journal of Operational Research, Elsevier, vol. 161(1), pages 256-274, February.
    9. Kangzhou Wang & Shouchang Chen & Zhibin Jiang & Weihua Zhou & Na Geng, 2021. "Capacity Allocation of an Integrated Production and Service System," Production and Operations Management, Production and Operations Management Society, vol. 30(8), pages 2765-2781, August.
    10. Robert A. Shumsky & Fuqiang Zhang, 2009. "Dynamic Capacity Management with Substitution," Operations Research, INFORMS, vol. 57(3), pages 671-684, June.
    11. ElHafsi, Mohsen & Fang, Jianxin & Hamouda, Essia, 2021. "Optimal production and inventory control of multi-class mixed backorder and lost sales demand class models," European Journal of Operational Research, Elsevier, vol. 291(1), pages 147-161.
    12. Kim, Eungab, 2004. "Stochastic vendor managed replenishment with demand dependent shipment," European Journal of Operational Research, Elsevier, vol. 152(3), pages 723-744, February.
    13. 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.
    14. Vaughan, Timothy S., 2007. "Cyclical schedules vs. dynamic sequencing: Replenishment dynamics and inventory efficiency," International Journal of Production Economics, Elsevier, vol. 107(2), pages 518-527, June.
    15. Alfieri, Arianna & Pastore, Erica & Zotteri, Giulio, 2017. "Dynamic inventory rationing: How to allocate stock according to managerial priorities. An empirical study," International Journal of Production Economics, Elsevier, vol. 189(C), pages 14-29.
    16. Sox, Charles R. & Jackson, Peter L. & Bowman, Alan & Muckstadt, John A., 1999. "A review of the stochastic lot scheduling problem," International Journal of Production Economics, Elsevier, vol. 62(3), pages 181-200, September.
    17. Gökçe Kahveciog̃lu & Barış Balcıog̃lu, 2016. "Coping with production time variability via dynamic lead-time quotation," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(4), pages 877-898, October.
    18. Long Gao & Susan H. Xu & Michael O. Ball, 2012. "Managing an Available-to-Promise Assembly System with Dynamic Short-Term Pseudo-Order Forecast," Management Science, INFORMS, vol. 58(4), pages 770-790, April.
    19. Albert Y. Ha, 1997. "Stock‐rationing policy for a make‐to‐stock production system with two priority classes and backordering," Naval Research Logistics (NRL), John Wiley & Sons, vol. 44(5), pages 457-472, August.
    20. Eungab Kim & Kaphoon Lee & Suk-Ho Kang, 2006. "Optimal purchasing policy in a two-component assembly system with different purchasing contracts for each component," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 63(2), pages 301-327, 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:inm:oropre:v:48:y:2000:i:5:p:709-720. 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: 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.