Modifying Job Sequencing Rules for Work-in-Process Inventory Reduction

In most reported studies of job dispatching rules the primary criterion for evaluating alternative rules has been the mean number of jobs in the shop, or the equivalent. This paper argues that the mean value of jobs in the shop is a more generally useful measure because it is a determinant of work-in-process (WIP) inventory carrying cost. For certain simple single-server systems the shortest processing time rule (SPT) is known to be optimal on the first criterion. A value-weighted version of SPT, termed SWPT, is optimal on the second criterion (mean value). We show by means of a simulation study that introduction of a similar dollar-weighting feature into more complex rules is effective in reducing mean WIP inventory, even in complex multimachine stochastic systems. Since our suggested dispatch rule modifications require value weighting, correct valuation of jobs is essential. The subject of how to determine the value of a job dynamically as it moves through the shop is discussed.