Operations & Supply Chain Management

We propose using a modification of the simple peak hour approximation (SPHA) for estimating peak congestion in multiserver queueing systems with exponential service times and time-varying periodic Poisson arrivals. This lagged pointwise stationary approximation (lagged PSA) is obtained by first estimating the time for the actual peak congestion by the time of peak congestion in an infinite server model and then substituting the arrival rate at this tiem int he corresponding stationary finite server model.

We consider multimachine scheduling problems with earliness and tardiness costs. We first analyze problems in which the cost of a job is given by a general nondecreasing, convex function F, of the absolute deviation of its completion time from a (common) unrestrictive due-date, and the objective is to minimize the sum of the costs incurred for all N jobs. (A special case to which considerable attention is given to the completion time variance problem.)

We consider the problem of precise estimation of service-level measures in multistage production-inventory systems when the system is managed for high levels of service. Precisely because the service level is high, stockouts, large backorders, and unfilled demands are rare and thus difficult to estimate by straightfoward simulation. We propose and analyze alternative estimators, based on changing the demand distribution to make these rare events less rare.

In this paper we discuss stochastic Economic Lot Scheduling Problems (ELSP), i.e., settings where several items need to be produced in a common facility with limited capacity, under significant uncertainty regarding demands, production times, setup times, or combinations thereof. We propose a class of production/inventory strategies for stochastic ELSPs and describe how a strategy which minimizes holding, backlogging, and setup costs within this class can be effectively determined and evaluated.

We develop a simple approximation for multistage production-inventory systems with limited production capacity and variable demands. Each production stage follows a base-stock policy for echelon inventory, constrained by production capacity and the availability of upstream inventory. Our objective is to find base-stock levels that approximately minimize holding and backorder costs. The key step in our procedure approximates the distribution of echelon inventory by a sum of exponentials; the parameters of the exponentials are chosen to match asymptotically exact expressions.

This paper offers an exact definition of the value created by firms together with their suppliers and buyers. The "added value" of a firm is similarly defined, and shown under certain conditions to impose an upper bound on how much value the firm can capture. The key to a firm's achieving a positive added value is the existence of asymmetries between the firm and other firms. The paper identifies four routes ("value-based" strategies) that lead to tthe creation of such asymmetries. Our analysis reveals the equal importance of a firm's supplier and buyer relations.

Many sequential planning problems can be represented as a shortest path problem in an acyclic network. This includes all deterministic dynamic programs as well as certain stochastic sequential decision problems. In this article, we identify a large class of shortest path problems for which a general efficient algorithm for the simultaneous solution and detection of minimal forecast horizons is developed.

We derive efficient and highly accurate approximations for the customer waiting-time distributions experienced in stochastic economic lot scheduling systems (SELSPs) that are governed by general base-stock policies under a cyclic or more general periodic item sequence. SELSPs involve settings where several items need to be produced in a common facility with limited capacity, under significant uncertainty regarding demands, unit production times, setup times, or combinations thereof.

We study the effect of changing buffer sizes in serial lines withgeneral blocking, a mechanism that incorporates limited intermediate finished goods inventory at each stage, as well as limited intermediate raw material inventory. This model includes ordinarymanufacturing, communication, andkanban blocking as special cases. We present conditions under which increasing buffer sizes or re-allocating buffer capacity increases throughput, and in some cases characterize optimal allocations.