Production-inventory analysis of single-station parallel machine make-to-stock/make-to-order system with random demands and lead times

Abstract

Hybrid Make-To-Stock (MTS)/ Make-To-Order (MTO) production systems have captivated the attention of academic and practical societies due to their high levels of flexibility and profits of stock-based systems. This paper addresses a single-station production system including two parallel machines with two production modes; one of machines is allowed to process MTO (specific) products, whilst both machines might process these products in the other mode. In the considered system, it is assumed that demands and lead times follow Poisson and exponential density functions, respectively. In this regard, a queueing model is developed upon which extensive numerical analyses are conducted with respect to the exclusive performance measures for MTS and MTO products. The defined measures comprise fill rate, average number of finished products, and average number of orders for MTS products, and average number of specific orders in the system, expected response time, and on-time delivery rate for MTO products. Additionally, sensitivity analyses are performed.

Keywords:

• Production planning
• hybrid MTS/MTO system
• parallel machine
• queueing system
• matrix geometric method

Jel Classification:

• L73
• L68
• L22
• D23