Batch ordering and batch replenishment policies for MTS-MTO manufacturing systems (original) (raw)
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International Journal of Advanced Manufacturing Technology, 2011
Suppliers produce a variety of products to serve both large and small customer orders with unreliable demand information. Furthermore, suppliers also face customer pressure to improve quality, lower cost, and reduce delivery delay. These conflicting objectives lead firms to use both make-to-stock and make-to-order production strategies together. These manufacturing strategies were known to be competing policies and in some cases the choice depends on characteristics of the product. In this study, the firms that manufactured multiple-item types are considered to be free to choose either production policy for each product type (no product-specific requirements are present). Then, using the order-arrival characteristics and cost parameters for each product type, the firm wants to decide which production/scheduling policy to use for each product type. Two production policy (MTS vs MTO) and two scheduling strategy (FIFO vs cyclic) are considered in this study. The analysis and numerical study show that there is no dominant strategy neither for production policy, nor product scheduling policy.
Development of an Optimal Decision Policy for MTS-MTO System
2011
POMS 22 nd Annual Conference Reno, Nevada, U.S.A. April 29 to May 2, 2011 Abstract: MTS-MTO system is suitable where standard modules are shared by various finished products through divergent finalization. The system can satisfy product variety by taking advantage of flexibility of MTO, but its performance is lowered when the capacity is constrained. One way of dealing with the problem without adversely affecting system service level is to limit the acceptance of customer orders. A model is developed using Markov Decision Process where semi-finished module inventory position and WIP in MTO stage are reviewed periodically. The optimal decision policy with regards to order acceptance is then found using dynamic programming. Based on the policy, a relationship between inventory policy, WIP, and the order acceptance decisions is then shown. This study takes MTS-MTO system research to a new stage by incorporating operational decisions, and explores optimal inventory policy in MTS-MTO sys...
An MADM Framework toward Hierarchical Production Planning in Hybrid MTS/MTO Environments
World Academy of Science, Engineering and Technology, International Journal of Mechanical, Aerospace, Industrial, Mechatronic and Manufacturing Engineering, 2009
This paper proposes a new decision making structure to determine the appropriate product delivery strategy for different products in a manufacturing system among make-to-stock, make-toorder, and hybrid strategy. Given product delivery strategies for all products in the manufacturing system, the position of the Order Penetrating Point (OPP) can be located regarding the delivery strategies among which location of OPP in hybrid strategy is a cumbersome task. In this regard, we employ analytic network process, because there are varieties of interrelated driving factors involved in choosing the right location. Moreover, the proposed structure is augmented with fuzzy sets theory in order to cope with the uncertainty of judgments. Finally, applicability of the proposed structure is proven in practice through a real industrial case company. The numerical results demonstrate the efficiency of the proposed decision making structure in order partitioning and OPP location. Keywords-Hybrid make-to-stock/make-to-order, Multi-attribute decision making, Order partitioning, Order penetration point. I. INTRODUCTION N the face of global competition, a manufacturing firm's survival increasingly depends on how best it can design, manage and restructure its production system to deal with product diversity, improve delivery reliability and also reduce system costs [1]. To cope with these issues, manufacturing companies often use different production systems. These production systems can be classified into two major categories: Make-To-Stock (MTS) and Make-To-Order (MTO) based on market demands' response policy [2]. The main advantage of MTS system is the short delivery time, since the final products are already in stock even before the customer order enters [1]. In an MTO system, an order is fulfilled only when it enters the system. This kind of production systems supplies a wide variety of products, usually in small quantities. Hence, ability to manufacture diverse orders and high production flexibility are the major advantages of this production system [2]. Recent years have shown a number of changes in
Performance analysis and design of batch ordering policies in supply chains
2007
Devising manufacturing/distribution strategies for supply chains and determining their parameter values have been challenging problems. Linking production management to stock keeping processes improves the planning of the supply chain activities, including material management, culminating in improved customer service levels. In this thesis, we investigate a multi-echelon supply chain consisting of a supplier, a plant, a distribution center and a retailer. Material flow between stages is driven by reorder point/order quantity inventory control policies. We develop a model to analyze supply chain behavior using some key performance metrics such as the time averages of inventory and backorder levels, as well as customer service levels at each echelon. The model is validated via simulation, yielding good agreement of robust performance metrics. The metrics are then used within an optimization framework to help design the supply chain by calculating optimal parameter values minimizing th...
Efficient management of production-inventory system in a multi-item manufacturing facility: MTS vs
Suppliers produce a variety of products to serve both large and small customer orders with unreliable demand information. Furthermore, suppliers also face customer pressure to improve quality, lower cost, and reduce delivery delay. These conflicting objectives lead firms to use both make-to-stock and make-to-order production strategies together. These manufacturing strategies were known to be competing policies and in some cases the choice depends on characteristics of the product. In this study, the firms that manufactured multiple-item types are considered to be free to choose either production policy for each product type (no product-specific requirements are present). Then, using the order-arrival characteristics and cost parameters for each product type, the firm wants to decide which production/scheduling policy to use for each product type. Two production policy (MTS vs MTO) and two scheduling strategy (FIFO vs cyclic) are considered in this study. The analysis and numerical study show that there is no dominant strategy neither for production policy, nor product scheduling policy.
Optimization of Batch Volume in a Multi-Part Manufacturing System
2016
In this paper, the problem of finding the optimum batch sizes in a High mix, Low volume production line is addressed. Finding optimum batch sizes is a problem faced by many manufacturers in a High mix, Low volume production environment. However, increase in the variety of boards causes interruptions in the production process. Frequent setups can lead to small lots and low inventories. In contrast, bigger batch sizes save production time by having fewer setups but they increase inventory value. Lack of optimization causes more hindrances when there is a bigger product mix in a production environment. Finding optimum batch sizes is a problem faced by many manufacturers in a High mix, Low volume production environment. Here, the problem of finding optimum batch sizes is solved using optimization techniques in Operations Research. Considering the nature of the research problem, a quantitative approach is adopted in this project. Furthermore, inspired by Setup Improvement theory, some im...
An optimal batch size for a production system operating under periodic delivery policy
Computers & Industrial Engineering, 1999
A manufacturing system that procures raw materials from suppliers in a lot and processes them to convert into finished product is considered in this research. An ordering policy is proposed for raw materials to meet the requirements of a production facility which, in turn, must deliver finished products demanded by outside buyers at fixed interval points in time. First, a general cost model is formulated considering both raw materials and finished products. Then using this model a simple procedure is developed to determine an optimal ordering policy for procurement of raw materials, and the manufacturing batch size to minimise the total cost for meeting the customer demand in time. The dependent relationships between production batch size and rawmaterial purchasing quantity, and various delivery patterns considered in recent literature are critically reviewed. The quality of solution is discussed and a few numerical examples are provided.
A Proposed Hierarchical Production Planning Structure for Combined MTS/MTO Environments
2006
From the viewpoint of the relationship between production release and order arrival, production system can be classified into make-to-stock (MTS), make-to-order (MTO), assemble-to-order (ATO), and engineer-to-order (ETO) systems. Production planning is a complicated task which requires cooperation among multiple functional units in an organization. Planning is the consequence of a hierarchy of decisions dealing with different issues in the manufacturing environment. A classical approach to handle this multi-level decision-making process is hierarchical production planning (HPP). There are only a handful of research papers that explicitly talk about the combined MTO/MTS situation and even there are fewer papers using HPP in these kinds of environments. In this paper we propose a hierarchical model in combined MTS/MTO environments, consists of four phases include: MTS/MTO products separation, acceptance/rejection of incoming MTO orders, HPP, and master production planning.
Case study for lot-sizing problem in MTO supply chain based on simulation optimization approach
… 2011 4th International …, 2011
Recently, manufacturers are taking a hybrid approach between MTS and MTO. However, most of literature research on production planning concentrates principally on MTS systems. The MTO area has not received the same degree of attention. There are only some research papers which are based on queueing network models that explicitly talk about the Lot Sizing Problem (LSP) in MTO sector. This paper presents a case study in MTO sector for which analytical model is still extremely complex up to now (multi-stage, multi-product, multi-location, multi-resource with setup, capacity constraints and stochastic demand). The objective is to determine a fixed optimal lot size for each manufacturing product type that will ensure Order Mean Flow Time (OMFT) target value for each finished product type. The adopted approach is carried out in three steps. A Discrete Event Simulation (DES) model was firstly implemented as a tool in estimating (OMFT) performance. Secondly, Design of Experiment is applied to conduct simulation experiments. Finally, a multiple-objective optimization is achieved by applying desirability optimization methodology. The study results illustrate that the LSP in MTO sector is viable and provides a prototype for further research in supply chain co-ordination.