Managing Uncertainty in a Serial Production Line

This paper studies a serial production line that is uncertain. We introduce a linear model of the uncertainty that can exist in the demand for the product and in each stage's processing time, yield, rework probability, and reliability. We construct a linear discrete-time rule for controlling pr...

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Bibliographic Details
Published inOperations research Vol. 44; no. 2; pp. 382 - 392
Main Authors Denardo, Eric V, Lee, Thomas Y. S
Format Journal Article
LanguageEnglish
Published Linthicum, MD INFORMS 01.03.1996
Operations Research Society of America
Institute for Operations Research and the Management Sciences
Subjects
Applied sciences
Assembly lines
Buffer inventories
Coefficients
Convexity
Exact sciences and technology
Inventory control, production control. Distribution
Linear models
Mathematical models
Mathematical theorems
Nonlinear programming
Operational research and scientific management
Operational research. Management science
Operations research
Optimal solutions
Probability
Production controls
production/scheduling: linear decision rules, stochastic control, optimizing operating characteristics by convex nonlinear programming
Safety stock
Standard deviation
Studies
Uncertainty
Workloads
Production management
Uncertain system
Continuous control
Stochastic control
Production line
Scheduling
Non linear programming
In series
Convex programming
Linear model
Optimization
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Summary:This paper studies a serial production line that is uncertain. We introduce a linear model of the uncertainty that can exist in the demand for the product and in each stage's processing time, yield, rework probability, and reliability. We construct a linear discrete-time rule for controlling production, and we show that repeated application of this rule leads the system to steady-state conditions, which include closed-form formulas for the mean and variance of each buffer's stock and the mean and variance of the workload in each stage. We optimize these operating characteristics by a convex nonlinear program. For the case of identical stages with no scrap, we show that this optimal solution tends to place larger buffer stocks toward the end of the line. We adapt these discrete-time results to the short-period surrogate of the analogous continuous-time control problem.
ISSN:0030-364X
1526-5463
DOI:10.1287/opre.44.2.382