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Priority allocation decisions in large scale MTO/MTS multi-product manufacturing systems : Technical report

Author

Listed:
  • Van Deft, Christian

    ()

  • Dallery, Yann
  • Hadj Youssef , Khaled

    ()

Abstract

In this paper, the authors consider a single stage multi-product manufacturing facility producing a large number of end-products for delivery within a service constraint for the customer lead-time. The manufacturing facility is modeled as a multi-product, multi-priority queuing system. In order to reduce inventory costs, an e±cient priority allocation between items consists in producing some items according to a Make-To-Stock (MTS) policy and others according to a Make-To-Order (MTO)policy epending on their features (costs, required lead-time, demand rates). The authors propose a general optimization procedure that gives a near-optimal °ow control (MTO or MTS) to associate with each product and the corresponding near-optimal priority strategy. We illustrate e±ciency of our procedure via several examples and by a numerical analysis. In addition, we show numerically that a small number of priority classes is su±cient to obtain near-optimal performances.

Suggested Citation

  • Van Deft, Christian & Dallery, Yann & Hadj Youssef , Khaled, 2008. "Priority allocation decisions in large scale MTO/MTS multi-product manufacturing systems : Technical report," Les Cahiers de Recherche 905, HEC Paris.
  • Handle: RePEc:ebg:heccah:0905
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    Keywords

    Make-to-Stock (MTS); Make-to-Order (MTO); Priority allocation; Scheduling rule; Heterogeneous multi-product queuing system;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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