Coordinating quality, production and sales in manufacturing systems

Abstract

We explore the benefits of jointly designing quality tolerances, customer admission and production control policies in manufacturing systems producing a single product to meet demand. These problems have been addressed separately in the past. We consider a simple admission/production control policy whereby the system produces until stock reaches a certain level and accepts orders until the backlog reaches another critical level. We model the system using queueing theory and propose an easily implementable procedure for selecting the optimal quality tolerances and the critical stock and backlog levels. From theoretical and numerical results, it appears that the proposed policy achieves a higher profit than other manufacturing practices, in which there is little or no coordination between the production, sales and quality control departments.

Acknowledgements

This work was supported in part by a research grant ‘Herakleitos’ of the Operational Programme for Education and Initial Vocational Training from the Greek Ministry of National Education and Religious Affairs.