Modeling make-to-order manufacturing systems with joint determination of lead times and order acceptance rates
Abstract
This work models and analyzes various issues associated with manufacturing lead times for multistage make-to-order manufacturing systems facing random customer order arrivals and stochastic manufacturing times. The objective of this study is to develop models for studying the interrelationships among the following manufacturing performance measures: manufacturing flow times, quoted lead-time reliability (earliness and tardiness), throughput (or demand) rates, inventory levels, resource utilization, and expected profits. The optimal policies for both the manufacturing lead time and the customer order-acceptance rate under three different manufacturing settings are developed for a class of probability distributions describing manufacturing flow times. The importance of jointly optimizing the manufacturing lead time and the customer-order acceptance rate is highlighted by an analytical demonstration. It shows that the lower bounds on both the magnitude of the profit penalty and the percentage profit-penalty for not optimizing the customer-order acceptance rate quadratically increase as the deviation from the optimal customer-order acceptance rate gets large. One work is to analyze the manufacturing lead time control problem for make-to-order manufacturing systems facing two types of customer demands. One type of demand is manufacturing lead time-sensitive, and higher prices prevail for short lead times; the other type of demand is price-sensitive but lead time-insensitive. It is shown that compared with the optimal policies developed for accepting one type of customer order only, the optimal policy derived for accepting both type of customer orders has the effect of both providing short manufacturing lead time and increasing the system utilization rate, while the expected profit is maximized. It is also analytically demonstrated that these policies accepting two type of customer orders may lead to significant benefits in maximizing the expected profit. Third work models and analyzes manufacturing lead time determination problem for make-to-order manufacturing systems with lead time-based competition in obtaining customer orders. It is shown that although the probability distribution of manufacturing flow times depends on the order-acceptance rate which in turn is a function of the quoted lead time, the earliness cost and the tardiness cost can still be formulated as a "newsboy" model for a class of probability distributions. In contrast to the base-stock quantity in the classical "newsboy" inventory problem, the decision variable in the manufacturing lead time control problem is the quoted lead time. The "newsboy" model is analytically demonstrated to be fairly insensitive to the choice of the base-stock quantity. This insensitivity is used to develop an algorithm for finding the quoted manufacturing lead times. All of the analytical results obtained in this study are supported by applications of these results to make-to-order manufacturing systems which is modeled as queueing systems. The specific optimal policies are derived for these applications and the resulting insights are provided.
Degree
Ph.D.
Advisors
Schwarz, Purdue University.
Subject Area
Management
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