Real-time disruption management in a two-stage production and inventory system

Abstract

This paper presents a general disruption management approach for a two-stage production and inventory control system. A penalty cost for deviations of the new plan from the original plan is incorporated and the concept of a disruption recovery time window is introduced. We define two classes of problems: one with fixed setup epochs and another with flexible setup epochs. With linear or quadratic penalty functions for production/ordering quantity change and fixed setup epochs, the best recovery plan is obtained by solving a quadratic mathematical programming problem. With convex penalty functions for quantity changes and flexible setup epochs, it is shown that the second stage orders have identical order quantities within each production cycle. Therefore, in a lot-for-lot system, the ordering and production quantities for both stages are the same. As a special case, we consider disruption recovery problems with short time windows spanning one or two production cycles. We also discuss solution procedures for both major and minor disruption problems and give an extension for the case of multiple retailers. Throughout the paper managerial insights are presented that indicate how a company should respond to various types of disruptions during its operations.

Handling Airport Ground Processes Based on Resource-Constrained Project Scheduling

“…As an individual research area, disruption management originally and traditionally focused on airline aircraft and crew scheduling (see [1,9] for example): The Descartes project, which is concerned with the e cient rescheduling of aircrafts, crews and passengers in case of disruptions, represents the main contribution to the development and application of respective concepts [10,11]. Currently, DM is also being adapted for various other areas: Production planning [12,13] as well as supply chain management [14] represent examples of respective domains of application.…”

Development of an inventory model for two suppliers with random capacity considering supply disruption

“…He presented an exact formulation of the long-run AC rate function based on deriving the stationary distribution of the on-hand inventory, and provided some numerical results. Xia et al (2004) presented a general disruption management approach for a two-stage production and inventory control system. A penalty cost for deviations of the new plan from the original plan was incorporated and the concept of a disruption recovery time window was introduced.…”

Extending the RCPSP for modeling and solving disruption management problems

“…Bean et al [20] were among the first to consider deviation costs in their approach to matchup scheduling, which is based on the idea of identifying an updated schedule that converges with the original one at some early point in the future. While Clausen et al [16] discuss disruption management in the execution of shipbuilding processes, Xia et al [21] investigate DM in the context of a two-stage production and inventory system, evaluating solutions for fixed and flexible setup epochs as well as different forms of penalty functions. Yang et al [19] consider cost and demand disruptions occurring on a single-product manufacturing plant and propose a pseudo-polynomial dynamic programming procedure for the general cost case and present advanced solution procedures for specific forms of cost functions.…”