TY - JOUR
T1 - Lot-sizing two-echelon assembly systems with random yields and rigid demand
AU - Grosfeld-Nir, Abraham
AU - Anily, Shoshana
AU - Ben-Zvi, Tal
PY - 2006/9/1
Y1 - 2006/9/1
N2 - We consider a two-echelon assembly system producing a single final product for which the demand is known. The first echelon consists of several parallel stages, whereas the second echelon consists of a single assembly stage. We assume that the yield at each stage is random and that demand needs to be satisfied in its entirety; thus, several production runs may be required. A production policy should specify, for each possible configuration of intermediate inventories, on which stage to produce next and the lot size to be processed. The objective is to minimize the expected total of setup and variable production costs. We prove that the expected cost of any production policy can be calculated by solving a finite set of linear equations whose solution is unique. The result is general in that it applies to any yield distribution. We also develop efficient algorithms leading to heuristic solutions with high precision and, as an example, provide numerical results for binomial yields.
AB - We consider a two-echelon assembly system producing a single final product for which the demand is known. The first echelon consists of several parallel stages, whereas the second echelon consists of a single assembly stage. We assume that the yield at each stage is random and that demand needs to be satisfied in its entirety; thus, several production runs may be required. A production policy should specify, for each possible configuration of intermediate inventories, on which stage to produce next and the lot size to be processed. The objective is to minimize the expected total of setup and variable production costs. We prove that the expected cost of any production policy can be calculated by solving a finite set of linear equations whose solution is unique. The result is general in that it applies to any yield distribution. We also develop efficient algorithms leading to heuristic solutions with high precision and, as an example, provide numerical results for binomial yields.
KW - Assembly system
KW - Multiple lot sizing
KW - Random yield
KW - Rigid demand
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U2 - 10.1016/j.ejor.2005.01.033
DO - 10.1016/j.ejor.2005.01.033
M3 - Article
AN - SCOPUS:33646519025
SN - 0377-2217
VL - 173
SP - 600
EP - 616
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 2
ER -