Design of product specifications and control policies in a single-stage production system

Screening (100%-inspection) is a common practice in quality engineering. Traditional screening procedures seek upper and lower specification limits for a quality characteristic associated with some product, such that the total quality cost per item is minimized. This practice ignores the effect of parts rejection on product lead times, inventory carrying costs, shortage costs, throughput, and, eventually, total profit rate of the system. In this paper, a single-stage production system is considered and two control policies arc determined jointly with the inspection plans. Numerical experiments indicate that such co-ordinated policies achieve a better performance than independently determined quality and production control policies     

One-machine, N-product-type, continuous-time scheduling with a common due date: a polynomially solvable case

The paper analyzes a manufacturing system made up of one-machine which produces TV-product-types with controllable production rates in response to product demands. The demands are characterized by different amounts of each product-type to be produced and a common due date. The objective is to minimize inventory and backlog costs which are incurred when meeting the due date results in inventory surpluses and shortages. With the aid of the maximum principle, the continuous-time scheduling problem is studied as an optimal control model and is reduced to a combinatorial one, polynomially solvable when the costs are either “agreeable” or when the number of the non-agreeable costs is limited.     

Batch sizing with controllable production rates

In this paper, we focus on a production system where a single product is manufactured on a single facility and delivered to the subsequent stage in batch shipments. In contrast to earlier works, we assume that the inventory on the producing stage is depleted at discrete time intervals, and analyse the effect of a variable production rate on the inventory build-up and the total costs of the system. We develop formal models for the case of equal- and unequal-sized batch shipments and propose solution procedures for the models. In a numerical study, we illustrate that deviating from the ‘design production rate’ of a production system may reduce inventory carrying costs and thus lead to lower total costs.     

Research on a Distribution Center Location Model Based on a Particle Swarm Optimization Algorithm

Logistics is supposed to be the important source of profits for the enterprises besides reducing material consumption and improving labor productivity.Transportation costs,distribution center construction costs,ordering costs,safe inventory costs and inventory holding costs are the important parts of the total logistics costs.In this paper,based on the research results of LMRP(location model of risk pooling) location with fixed construction cost,the LMRPVCC(location model of risk pooling based on variable c...     

A Future Value Approach to Determining Project Duration

Optimal project duration for situations where project duration can be shortened by “crashing” activities is analyzed. The cost components considered are; regular direct costs, crashing costs and overhead costs. The regular direct costs are those associated with carrying out the various activities of the project. The crashing costs are those associated with shortening the project duration and represent the time-cost tradeoff. The overhead costs are assumed to be constant throughout the project's life. To facilitate the analysis, the costs are approximated by mathematical expressions. Calculating the cumulative future value of all costs leads to determining the optimal project duration.     

Joint production and shipment lot sizing for a delivery price-based production facility

A joint economic production quantity (EPQ) and delivery quantity model for a production system is investigated in this paper. More specifically, an EPQ policy is implemented in the production system, while a smaller shipping quantity is periodically dispatched to the customer. The production system is also responsible for the shipment cost, i.e. a delivery price-based procurement from the customer. The considered cost includes setup cost to launch the batch production, inventory carrying cost, and transportation cost, where the transportation cost is a function of the delivery quantity. A per unit time cost model is developed and analysed to determine the optimal production and delivery quantities. Under some mild conditions, it can be shown that the joint cost function is convex with respect to the production quantity; and the number of delivery is an integer in each replenishment cycle. Computational study has demonstrated the significant impact of the joint decision model on the operating cost. In particular, the reduction in total cost can be more than 15% when inventory carrying costs, and/or transportation costs, are high.     

A Comparative Study of Continuous and Periodic Inspection Policies in Deteriorating Production Systems

Continuous or periodic inspection policies are often used to monitor the maintenance of a production process. In this paper, a comparative study of continuous and periodic inspection policies in deteriorating production systems is provided. The overall cost function is comprised of: set-up, inspection, inventory holding, defective and restoration costs. Different models, constant, linear and exponential, of restoration costs are considered. Tradeoffs between the continuous and the periodic inspection policies are analyzed, and ranges of values of system or cost parameters for which the continuous inspection policy is preferred are established.     

Proposed Short Runs Multivariate Control Charts for the Process Mean

In recent years, there is a trend in manufacturing industries to produce smaller lot sizes or low volume production. This trend is due to increased emphasis on just-in-time techniques (JIT), synchronous manufacturing, job-shop settings, the reduction of in-process inventory, and costs. The term used to describe such low volume production is “Short Runs Production” or more commonly “Short Runs.” In such an environment, the run of a process is short, usually fewer than 50. Therefore, a principal practical problem is the need to chart a large number of different processes and the consequent large number of charts required. This article discusses proposed multivariate control charts for short runs based on individual measurements and subgrouped data.     

Analysis of Excess Stock in Multiproduct Inventory Systems

A primary function of production management is the control of inventories. The typical manner of economic inventory control calls for a “pre-stocking” approach in which the focus is on the reorder quantities which should be put into inventory. A second manner of controlling inventories is what can be called a “post-stocking” analysis. Here the focus is on how much of the present inventory already in stock should be declared as surplus and disposed of. This paper describes the development and implementation of an analytical procedure for this second, excess inventory issue. The procedure is described in the context of an application to a General Motors carburetor assembly process in which product structure interactions play a significant role.     

OPTIMAL PRODUCTION PLANNING AND INVENTORY CONTROL*

This paper is concerned with the optimal production planning and inventory control. The first problem is a multiperiod production scheduling problem in which the objective is to minimize the operating cost for a planning period. This cost is composed principally of the sum of the production cost and inventory carrying cost. The second problem considers an inventory system with two decision variables in each planning period. These are the production schedule and work force which are to be determined so as to minimize the operating cost which includes the costs of changing the production rate, of changing the work force and of carrying the inventory. The maximum principle in the discrete form is used to reduce both the first problem which has N decision variables and the second problem which has 2N decision variables respectively to a series of two decision variables problems. The so-called sequential simplex pattern search technique is used to determine the optimal values of these two decision variables. Numerical examples are given to demonstrate the method.     

An integrated production-inventory model with reprocessing and inspection

Competitive pressures continually force management to examine cost and quality levels of production systems. In this paper these issues are addressed via a model that synthesizes several potential features of production systems: production processes, quality control procedures, in-process inventory and reprocessing. For any specified inspection configuration the model can be used, for serial production systems, to obtain closed-form expressions for two important decision variables: optimal lot size and reprocessing batch size, which minimize the total system costs. A numerical example highlights the interdependencies and the role of various system features in determining the values of the decision variables and hence in reducing the total costs. The paper also discusses the managerial implications of the model.     

The Dynamic Lot-Sizing Problem for Multiple Items Under Limited Capacity

This paper addresses the problem of scheduling the timing and quantities of production of n different products over m periods for a single production facility with a prespecified capacity. We assume that the demand is deterministic and can vary from one period to another and from one product to another. The objective is to minimize the sum of production setup and inventory holding costs. For medium-size problems, optimal solution algorithms do not yet exist and therefore heuristic solution algorithms are of interest. Most of the existing heuristics make use of the “forward-pass” concept in one way or the other. Forward pass means we begin by determining the lot sizes for earlier periods before moving to study the later periods. In this paper we study the forward-pass approach as well as a different solution approach which we call the four-step algorithm. We develop the feasibility conditions for pure forward-pass algorithms. Finally, we perform a comparative evaluation study.     

DUAL SOURCING COST-OPTIMIZATION WITH UNRESTRICTED LEAD-TIME DISTRIBUTIONS AND ORDER-SPLIT PROPORTIONS

Among recent studies considering the splitting of an order among several suppliers (i.e., in “multiple sourcing”), one group considered only the favorable effect of multiple suppliers on the effective lead time demand and required safety stock, but its effects on the annual order and holding cost components have been ignored. Another group that considers the effect of using two suppliers on all relevant cost components imposes severe restrictions on the suppliers' lead-time distributions as well as the proportion of order-split between the suppliers. Our primary purpose is to present easily-solvable decision models for minimizing the sum of annual holding and ordering costs with two suppliers, subject to a maximum allowable stockout risk; restrictions on lead-time distributions and order-split proportion are completely eliminated. Solving these models gives the optimal total order quantity, reorder point and proportion of split between the two suppliers. Numerical results from our models reveal some unexpected observations; e.g.: (i) In using two suppliers, die reduction of inventory carrying cost (a hitherto unrecognized component) is at least as important, and often considerably more important than the effect of safety-stock-cost reduction, (ii) Although intuitively one might use suppliers with the shortest (mean) lead times, it is actually better to have two suppliers such mat the second supplier's mean lead time is “suitably” larger man the first's; this could mean excluding the one with lowest mean lead times among the candidates for the second supplier, (iii) The optimal proportion of split varies with, among other factors, the difference in the suppliers' mean lead times.     

Economic development of specifications for 100% inspection based on asymmetric quality loss functions

As a means of providing protection for both the producer and the consumer, for example as in airport security, 100% inspection plays an important role in today's environment. The same is true for some industrial or other decision-making processes where the consequences of excessive deviations from target values are very high. Motivated by Deming's “all or none” inspection rule and associated philosophy for quality improvement, we develop an inspection strategy by considering the costs to both the producer and the customer, and thus to the whole system. A general optimization model is formulated to determine whether 100% inspection is to be performed or no inspection to be performed. If complete inspection is chosen then the optimal specification limits can be determined at the same time. Specifically, we consider two types of asymmetric quality loss functions for the “target the best” quality characteristic: the asymmetric quadratic quality loss function, and the asymmetric piecewise linear loss function. For each loss function, we propose an optimization model to determine the optimal process mean and specification limits. Numerical examples are given to illustrate the proposed models that can be used to improve the quality of the output of any process.     

Energy Accounting: A New Field Develops

Energy is an important component of the total productivity question and since its costs have been increasing faster than the rate of inflation, its importance is growing over time. As with most productivity measurement, energy productivity is difficult to monitor due to lack of metering and lack of data on “standard energy costs.” Also, manufacturers differ greatly in their energy use profile due to such variables as location, weather, number of people, product, manufacturing intensity, and a host of others. This paper examines energy productivity monitoring and control measurement systems. Standard “one-shot” efficiency measures are examined and then some unique ideas and more sophisticated computer programs (BLAST and DOE II) for calculating standard energy costs are presented and discussed.     

Effect of rework,rejects and inspection on lot size with work-in-process inventory

The economic order quantity and economic production quantity models are the most commonly used inventory models in production environments for the calculation of optimum lot size. However, these models are based on the unrealistic assumption that every process produces good quality products every time. Moreover, the impact of inspection is neglected in all extended inventory control models involving work in process inventory. By taking both imperfect production and lot size inspection into consideration, this paper presents a more realistic approach for the modelling of optimum lot size and total cost with a focus on the work in process inventory. A mathematical model is derived for optimum lot size based on the minimisation of the average cost. Our approach incorporates the effect of rework, rejects and inspection on work in process inventory. The significant effect of imperfect production and inspection on optimum lot size is evaluated via numerical examples. In comparison to existing models, the proposed model is a more generalised and flexible form of inventory model for independent demands.     

Robust policies for a multi-stage production/inventory problem with switching costs and uncertain demand

In this paper, we seek robust policies for a multi-stage production/inventory problem to minimise total costs, including switching, production, inventory or shortage costs. While minimising switching costs often leads to non-convexity in the model, 0–1 variables are introduced to linearise the objective function. Considering the impossibility of obtaining the exact distribution of uncertain demand, we study the production/inventory problem under worst cases to resist uncertainty. In contrast to traditional inventory problems, unexpected yields in production are considered. Robust support vector regression is developed to approximate the yields of each unit. A mixed-integer linear programming is proposed, employing the duality theory to address the min–max model. A practical case study from cold rolling is considered. Experiments on the actual steel production data are reported to illustrate the validity of the proposed approach.     

A supply chain model with vendor-managed inventory,consignment, and quality inspection errors

This paper considers the integration between quality control and production inventory control in supply chain management. Specifically, we study the effect of inspection errors on the costs incurred in a supply chain system with a single vendor and multiple buyers. In this system, the vendor enters into a vendor-managed inventory (VMI) and a consignment stock (CS) partnership with several buyers. We assume that the items made by the vendor are not in perfect quality, but they contain a given proportion of defective units. We also assume that quality inspection of these items by the buyers is subject to sampling errors. Three cases indicating to different levels of supply integration are considered: VMI–CS system, traditional system and integrated system. For each case, a mathematical model is formulated, an optimum solution is developed, and a numerical example is solved.     

Integrated production planning and quality control for linear production systems under uncertainties of cycle time and finished product quality

This work considers serial production systems with several process steps and a possible quality control at final step. It deals with the problem of optimising planned lead time when the real lead time for each process is stochastic and the finished product quality is uncertain unless it is inspected. Three analytical models are proposed aiming to minimise the expected total cost, which is composed of the inventory and backlogging costs for the finished product and quality costs associated with inspection and non-conformities. These models correspond to three quality control policies: (i) without quality control, (ii) with quality control but without taking into account the inspection duration when optimising the planned lead time and (iii) with quality control and with considering the inspection duration when optimising the planned lead time. Based on the results, it can be highlighted the economic advantage of integrating quality control at the early stage of supply and production planning decisions for some cost parameters conditions. The robustness of the proposed models is also analysed regarding the variance of the probability distributions of the lead times.     

Integrated production quality and condition-based maintenance optimisation for a stochastically deteriorating manufacturing system

This paper investigates the problem of optimally integrating production quality and condition-based maintenance in a stochastically deteriorating single- product, single-machine production system. Inspections are periodically performed on the system to assess its actual degradation status. The system is considered to be in ‘fail mode’ whenever its degradation level exceeds a predetermined threshold. The proportion of non-conforming items, those that are produced during the time interval where the degradation is beyond the specification threshold, are replaced either via overtime production or spot market purchases. To optimise preventive maintenance costs and at the same time reduce production of non-conforming items, the degradation of the system must be optimally monitored so that preventive maintenance is carried out at appropriate time intervals. In this paper, an integrated optimisation model is developed to determine the optimal inspection cycle and the degradation threshold level, beyond which preventive maintenance should be carried out, while minimising the sum of inspection and maintenance costs, in addition to the production of non-conforming items and inventory costs. An expression for the total expected cost rate over an infinite time horizon is developed and solution method for the resulting model is discussed. Numerical experiments are provided to illustrate the proposed approach.