Capacity and inventory planning for make-to-order production systems. The impact of a customer required lead time distribution (Q395132)

This book is strongly based on the Ph.D. thesis of the author submitted in 2013. It presents seven chapters on 138 pages and includes the results from four earlier research papers of the author. After a short introduction in Chapter 1, a brief literature review is given in Chapter 2. In three sections, a review on the literature covering the relationship between the logical key performance indicators utilization (Section 2.1), work release rules (Section 2.2) and on capacity investment (Section 2.3) are given. Chapter 3 deals with the single-stage service level and tardiness model. After some introductory comments, a model is developed which gives a deeper understanding of the relationship between production lead time, utilization and work-in-progress in a single-stage production system and the service level as well as the tardiness of such a system (Section 3.2). Moreover, an extension of this model is presented which allows the reduction of finished-goods-inventory. In a separate section, a numerical study by means of three examples is provided (Section 3.3). Chapter 4 deals with simultaneous capacity and planned lead time optimization. First the general optimization problem is presented and analyzed (Section 4.2). Then the special case of a single-stage production system with an upfront buffer and a planned lead time is investigated (Section 4.3). Furthermore, a two-stage production system with exponentially distributed processing times and interarrival times as well as exponentially distributed costumer required lead times is analyzed. A numerical study completes this chapter. Chapter 5 deals with an optimal composition of the number and size of the machines. After some introductory comments, the general multi-stage model is presented and structural properties of an optimal solution are given (Section 5.2). Then expressions for the work-in-progress, the finished-goods-inventory and the backorder costs for the two-stage \(M|M|s\) production system are presented (Section 5.3). Finally, a numerical study is provided, where the influence of the machine size on the optimal cost, the influence of the machine number on the optimal cost, the performance of the heuristic is analyzed and the influence of uncertain input rates is discussed. Chapter 6 discusses the problem of capacity investment and a work-ahead-window setting in a service level constraint model. Again after some short introductory remarks for this chapter, the single-stage \(M|M|1\) model discussed in Chapter 4 is extended to satisfy the service level constraint instead of including the backorder costs, and a numerical example is presented (Section 6.2). Then a service level constraint, single-stage, multi-item capacity investment model considering inventory costs is developed for a normally distributed demand applying an earliest due date rule (Section 6.3). Finally, the service level equation for a two-stage \(M|M|s\) production system applying a work-ahead-window work release rule with exponentially distributed customer required lead time together with as numerical example are presented (Section 6.4). In particular, it turned out that the general findings from Chapter 5 do not change when the backorder costs are replaced by a service level constraint. The proofs of the major results are presented in the appendices to the particular chapters. Finally, some conclusions are presented in Chapter 7.