A queueing approach to production-inventory planning for supply chain with uncertain demands: Case study of PAKSHOO Chemicals Company

Teimoury, Ebrahim; Modarres, Mohammad; Ghasemzadeh, Fatemeh; Fathi, Mahdi

doi:10.1016/j.jmsy.2010.08.003

Cited by 26 publications

(19 citation statements)

References 32 publications

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“…Teimoury et al (2010) proposed an integrated two stage inventory-queue model and production planning model based on queuing approach in real case study of PAKSHOO chemicals company uncertain demands. developed a queuing model for locating OPP in a two-echelon supply chain with impatient customers.…”

Section: Literature Reviewmentioning

confidence: 99%

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An integrated operations-marketing perspective for making decisions about order penetration point in multi-product supply chain: a queuing approach

Teimoury

Fathi

2013

International Journal of Production Research

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This study is dedicated to strategic decision-making regarding order penetration point (OPP), which is the boundary between make-to-order (MTO) and make-to-stock (MTS) policies. This paper considers a supply chain in which a manufacturer produces semi-finished items on an MTS basis for a retailer that will customise the items based on MTO policy. This two-echelon supply chain offers different products to a market comprised of homogenous customers who have different preferences and willingness to pay. The retailer wishes to determine the optimal OPP, the optimal semi-finished goods buffer size, and the price of the products with assumption of price sensitive demand function. Moreover, we consider both shared and unshared capacity models in this paper. A matrix geometric method is utilised to evaluate various performance measures for this system, and then, optimal solutions are obtained by enumeration techniques. The suggested queuing approach is based on a new perspective between the operations and marketing functions which captures the interactions between several factors including inventory level, product pricing, OPP, and delivery lead time. Finally, parameter sensitivity analyses are carried out and the effect of demand on the profit function, the effect of prices ratio on completion rates ratio and buffer sizes ratio and the variations of profit function for different prices, completion percents, and buffer sizes are examined. Keywords: queuing system; supply chain; order penetration point (OPP); integrated operations-marketing perspective; MTS-MTO queue; matrix geometric method (MGM) 1. Introduction One production system which has recently attracted researchers' and practitioners' consideration is hybrid make-to-order/ make-to-stock (MTS-MTO) (Rafiei and Rabbani 2012). The MTS production system can meet customer orders fast, but confronts inventory risks associated with short product life cycles and unpredictable demands. In contrast, MTO producers can provide a variety of products and custom orders with lower inventory risks at the expense of longer customer lead times. Moreover, in MTS production, products are stocked in advance, while in MTO, a product starts to be produced only after an order is received. The MTS-MTO supply chain is appropriate wherever common modules are shared by various finished products through divergent finalisation. The MTS-MTO supply chain inherits two key characteristics: First, it can reduce cost of producing standard modules by taking advantage of economies of scale during the MTS stage. Second, it can concurrently satisfy the need for high product variety by taking advantage of MTO's flexibility (Wang et al. 2011). To differentiate the three above-mentioned systems, the concept of Order Penetration Point (OPP) is utilised in Figure 1. This point specifies the stage where the customer's desired specifications influences the production value chain (Hoekstra, Romme, and Argelo 1992). As shown in Figure 1, customer's specifications are taken into consideration in different places ...

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Section: Literature Reviewmentioning

confidence: 99%

“…By bringing Table 1, we prefer to display a general overview of our developed OPP models for readers in this section. As shown in Table 1, our developed OPP models in Teimoury et al (2010), Teimoury et al (2011) and current research) are in MTS, MTO, and MTS-MTO environment, respectively.…”

Section: Introductionmentioning

confidence: 99%

An integrated operations-marketing perspective for making decisions about order penetration point in multi-product supply chain: a queuing approach

Teimoury

Fathi

2013

International Journal of Production Research

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“…-textile (Ishikura, 1994;De Toni and Meneghetti, 2000;Guo et al, 2006;Min and Cheng, 2006;Wong and Leung, 2008;Ngaia et al, 2014) -chemical (Meijboom and Obel, 2007;Ulstein et al, 2007;Teimoury et al, 2010;Fumero et al, 2012;Shabani and Sowlati, 2013;Van Elzzaker et al, 2014) All of them cope with very lengthy setup times in their manufacturing processes and at the same time their product families minimum run length are almost, equal or even higher than the planning period. Many firms in these sectors only work with planning overviews based on spreadsheets.…”

Section: Introductionmentioning

confidence: 99%

A Mathematical Programming Model for Tactical Planning with Set-up Continuity in a Two-stage Ceramic Firm

Perales

Alemany

2016

Int. J. Prod. Manag. Eng.

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It is known that capacity issues in tactical production plans in a hierarchical context are relevant since its inaccurate determination may lead to unrealistic or simply non-feasible plans at the operational level. Semi-continuous industrial processes, such as ceramic ones, often imply large setups and their consideration is crucial for accurate capacity estimation. However, in most of production planning models developed in a hierarchical context at this tactical (aggregated) level, setup changes are not explicitly considered. Their consideration includes not only decisions about lot sizing of production, but also allocation, known as Capacitated Lot Sizing and Loading Problem (CLSLP). However, CLSLP does not account for set-up continuity, specially important in contexts with lengthy and costly set-ups and where product families minimum run length are similar to planning periods. In this work, a mixed integer linear programming (MILP) model for a two stage ceramic firm which accounts for lot sizing and loading decisions including minimum lot-sizes and set-up continuity between two consecutive periods is proposed. Set-up continuity inclusion is modelled just considering which product families are produced at the beginning and at the end of each period of time, and not the complete sequence. The model is solved over a simplified twostage real-case within a Spanish ceramic firm. Obtained results confirm its validity.

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“…In these systems, an important issue is the reaction of inventory management to queuing of demands. It is also different from the traditional inventory management because the inventory is consumed at the serving rate rather than the customers' arrival rate when there are customers queued up for service (Teimoury et al, 2010;Chang and Lu, 2010). Berman and kim (1999) considered a queuing-inventory system with Poisson arrival rate and exponential service times under zero lead time.…”

Section: Introductionmentioning

confidence: 99%

Multi-Objective Soft Computing-Based Approaches to Optimize Inventory-Queuing-Pricing Problem under Fuzzy Considerations

Alinezhad¹,

Mahmoudi²,

Hajipour³

2016

Industrial Engineering and Management Systems

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Due to uncertain environment, various parameters such as price, queuing length, warranty, and so on influence on inventory models. In this paper, an inventory-queuing-pricing problem with continuous review inventory control policy and batch arrival queuing approach, is presented. To best of our knowledge, (I) demand function is stochastic and price dependent; (II) due to the uncertainty in real-world situations, a fuzzy programming approach is applied. Therefore, the presented model with goal of maximizing total profit of system analyzes the price and order quantity decision variables. Since the proposed model belongs to NP-hard problems, Pareto-based approaches based on non-dominated ranking and sorting genetic algorithm are proposed and justified to solve the model. Several numerical illustrations are generated to demonstrate the model validity and algorithms performance. The results showed the applicability and robustness of the proposed soft-computing-based approaches to analyze the problem.

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A queueing approach to production-inventory planning for supply chain with uncertain demands: Case study of PAKSHOO Chemicals Company

Cited by 26 publications

References 32 publications

An integrated operations-marketing perspective for making decisions about order penetration point in multi-product supply chain: a queuing approach

An integrated operations-marketing perspective for making decisions about order penetration point in multi-product supply chain: a queuing approach

A Mathematical Programming Model for Tactical Planning with Set-up Continuity in a Two-stage Ceramic Firm

Multi-Objective Soft Computing-Based Approaches to Optimize Inventory-Queuing-Pricing Problem under Fuzzy Considerations

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