Lot sizes, lead times and in-process inventories

Article Abstract:

Total lead time needed to manufacture products is an important consideration in many production situations. Long lead times result in higher costs associated with higher work-in-process inventory. Long lead times also tend to be associated with increased uncertainty about requirements, larger safety stocks, and worsened due date performance. Traditional lot sizing models do not account for lead time related expenses, even though systematic connections exist between lot sizes and lead times. The implications of these relationships are examined for batch manufacturing shops with queues, lot sizing, and work-in-progress inventories.

Analysis, Management, Production management, Economic lot size, Inventories

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Approximations for a lost-sales production-inventory control model with service level constraints

Article Abstract:

A one-product production-inventory model, where the production rate can be dynamically adjusted in order to cope with random fluctuations in demand, is considered. In this model, excess demand is lost, and the average number of lost-sales occurrences per unit time and the fraction of demand that is lost are used as service measures. Practically useful results for a two-critical number policy are derived, in order to achieve a prespecified service level. Simulation results show that the approximations are quite accurate and thus are useful for practical purposes.

Models, Inventory control, Production control

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