Setting Planned Leadtimes in Customer-Order-Driven Assembly Systems

Zümbül Atan · A.G. de Kok · Nico Dellaert · Richard van Boxel

25 citations0/0 files storedManufacturing & Service Operations Management

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Supply Chain and Inventory Management Scheduling and Optimization Algorithms Advanced Queuing Theory Analysis

Abstract

We study an assembly system with a number of parallel multistage processes feeding a multistage final assembly process. Each stage has a stochastic throughput time. We assume that the system is controlled by planned leadtimes at each stage. From these planned leadtimes the start and due times of all stages can be derived. If a job finishes at a particular stage and has to wait before the start of the next job(s), a holding cost proportional to the waiting time is incurred. A penalty cost proportional to the lateness is incurred when the last stage of the final assembly process finishes after its due time. The objective is to determine planned leadtimes for each individual stage, such that the expected cost of a customer order is minimized. We derive the recursive equations for the tardiness and earliness at all stages and an exact expression for the expected cost. We discuss the similarity between these expressions and those for serial inventory systems. Based on this observation and a conjecture related to the generalized Newsvendor equations, we develop an iterative heuristic procedure. Comparison with a numerical optimization method confirms the accuracy of the heuristic. Finally, we discuss an application of the model to a real-life case, showing the added value of a system-wide optimization of planned leadtimes compared to current practice.

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References

2000Foundations of Inventory Management 1960Optimal Policies for a Multi-Echelon Inventory Problem 2004Optimal Policies for a Multi-Echelon Inventory Problem 1982Approximating a Point Process by a Renewal Process, I: Two Basic Methods 1989Optimal Inventory Policies for Assembly Systems Under Random Demands 1976MATERIAL REQUIREMENTS PLANNING UNDER UNCERTAINTY 1994Safety Stock versus Safety Time in MRP Controlled Production Systems 1987Setting Planned Leadtimes in Serial Production Systems with Tardiness Costs

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2018Effect of limited capacity on optimal planning parameters for a multi-item production system with setup times and advance demand information 2020Push verse pull: Inventory-leadtime tradeoff for managing system variability 2018Setting optimal planned leadtimes in configure-to-order assembly systems 2020A hybrid genetic algorithm for a multilevel assembly replenishment planning problem with stochastic lead times

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