A By-Product Production System with an Alternative

Abstract

This paper considers the optimal control of a production system which is composed of two distinct production processes, types A and B, that produce two different products, 1 and 2, having distinct random demands. Production type A produces both products in amounts determined by a fixed set of production coefficients. Type B can only be used to make product 2. Costs consist of linear production costs and convex holding and shortage costs. Each period, the optimal production level of each type must be determined. The criterion is the minimum expected discounted total cost. Results show that the decision space of each period is partitioned into four regions by three monotone functions and a point. Extensions include capacitated production, nonstationary costs, lost sales, fixed lead times aid the general m process-n product system.inventory/production, inventory/production: stochastic models

Designing the blood supply chain: how much, how and where?

“…Decision‐making in production planning in the blood supply chain has received comparatively little attention in the modelling literature. Analytical models have been developed to minimize production cost . Special attention has been paid to platelets because of their short shelf‐life , but few incorporate production planning into network design decisions.…”

Simulation-optimization model for production planning in the blood supply chain

“…Some articles have studied aspects such as production alternatives, single product production and platelet production as well as production capacity and internal processes. The first studies that consider multiple products are presented by Deuermeyer and Pierskalla [18] and Deuermeyer [19] who develop an analytical model to minimize the production costs of RBCs and platelets. In this paper, production decisions are associated with different production processes and are defined according to the initial inventories of each product.…”

Co-production models with random functionality yields

“…Although a considerable amount of research has been done on lot-sizing when yields are random (see survey in Yano and Lee, 1995), and on co-production systems when yield is perfect (see, for example, Deuermeyer and Pierskalla, 1978;McGillivray and Silver, 1978), relatively little analytical work is available on co-production systems of the kind described above in the context of (explicitly) stochastic variable yield inventory theory. Procurement decisions with two-way substitutable demands, but perfect yield, were considered by Parlar and Goyal (1984).…”