@article{3aab10c4b6024392a50a19ce006c12e8,
title = "A comparison of make-to-stock and make-to-order in multi-product manufacturing systems with variable due dates",
abstract = "This article models a single-stage hybrid production system, which can be regarded as a Make To Order (MTO) production system with safety stocks or a Make To Stock (MTS) production system with advance demand information. In an environment with multiple products and variable customer due dates, optimality conditions for safety stocks (base stocks) and safety lead times (work-ahead window) that minimize inventory and backorder costs are derived. For a simplified M/M/1 system with exponentially distributed customer required lead time, an explicit comparison between MTO and MTS is conducted. A pure MTO policy gets relatively more favorable to a pure MTS policy if inventory holding costs increase, backorder costs decrease, the mean customer required lead time increases, or the processing rate increases. In a numerical study, the influence of variance, the behavior of optimal parameters, and the cost reduction potential of this hybrid policy are shown.",
keywords = "make-to-order, make-to-stock, manufacturing system control, Manufacturing system design, multi-product production system, queuing, variable due dates",
author = "Klaus Altendorfer and Stefan Minner",
note = "Funding Information: Stefan Minner is a Full Professor for Logistics and Supply Chain Management at TUM School of Management, Technische Universit{\"a}t M{\"u}nchen. He studied Business Administration at the University of Biele-feld and received his doctoral degree from the University of Magdeburg. He was a postdoctoral researcher at the University of Calgary and has held positions at the universities of Paderborn, Mannheim, and Vienna. His primary research interests are logistics network design under uncertainty, supply chain coordination, and inventory management. He currently serves as the Editor-in-Chief of OR Spectrum and is a member of several other editorial boards. He is the president of the International Society for Inventory Research and a member of the advisory board of the German Operations Research Society, the scientific advisory board of the German Logistics association, and the Research Committee of the European Logistics Association. Copyright: Copyright 2014 Elsevier B.V., All rights reserved.",
year = "2014",
month = mar,
day = "4",
doi = "10.1080/0740817X.2013.803638",
language = "English",
volume = "46",
pages = "197--212",
journal = "IISE TRANSACTIONS",
issn = "0740-817X",
publisher = "Taylor and Francis Ltd.",
number = "3",
}